http://biz.yahoo.com/rf/010622/l22527453_3.html

Friday June 22, 12:37 pm Eastern Time
By Ben Hirschler and Michael Shields

LONDON/ZURICH, June 22 (Reuters) - Swiss-based Serono SA locked horns with U.S. firm Biogen Inc (NasdaqNM:BGEN - news) on Friday in an increasingly bitter scientific and legal battle over whose drug is better for treating multiple sclerosis.

Defying a court injunction, Europe's biggest biotechnology group repeated claims that patients treated with its MS drug Rebif were less likely to suffer relapses than those on Biogen's Avonex.

Biogen -- currently the global leader in the MS medicine market -- said Serono risked hefty fines, and its executives potential imprisonment, for violating the Geneva court order.

Serono, which based its claims on further data from a head-to-head clinical trial, needs to prove Rebif's superiority over Avonex to have a chance of entering the $1 billion-a-year U.S. market for MS drugs by breaking Avonex's "orphan drug" exclusivity which runs out in mid-2003.

Geneva-based Serono first said in May the trial showed Rebif was better, and it reiterated on Friday that Rebif patients had 90 percent greater odds of remaining relapse-free than those on Avonex. Some 32 percent fewer patients on Rebif experienced a relapse, it said.

"The...study results are highly significant and further demonstrate the clinical efficacy of Rebif," Serono Chief Executive Ernesto Bertarelli said in a statement issued in London, where the data were released at a scientific conference.

"We will shortly be submitting this data to the FDA (Food and Drug Administration) for the review in our effort to make Rebif available to patients in the United States."
 

SUBMISSION TO FDA

Andrew Galazka, Serono's senior vice president for scientific affairs, told Reuters the company would submit the data to the FDA in the third quarter of this year and was upbeat on prospects the U.S. agency would approve it.

"We did the (trial) on the understanding that this would be sufficient, so provided they come to the same conclusion about this trial as our analysis of it has been so far, then I think they will give us approval early but I cannot repeat enough it is their call," he said.

"I wouldn't be so presumptuous to say this is a done deal. It is really up to the FDA now," he said, reiterating Serono's view that a U.S. launch for Rebif by the middle of 2002 was possible if all went smoothly.

Serono stock briefly advanced to an eight-month high of 1,810 Swiss francs on the latest news before slipping to close at 1,755. Biogen was off 6.5 percent at $62.47 by 1610 GMT.
 

"MISLEADING CLAIMS"

Biogen said the claims made by Serono were misleading and said it believed the data was unlikely to be enough to overturn its exclusive market position.

The Cambridge, Mass.-based company had sought to prevent Serono from repeating the claims via a court order obtained in Geneva on Thursday.

She said the Biogen would now inform the public prosecutor in Geneva who had authority to enforce the court order.

Bertarelli said in a conference call that Biogen was being "deliberately obstructive" and described the injunction as "a below-the-belt manoeuvre".

"The risk we are taking is to pay a fine, but obviously we have a chance to explain the purpose of our presentation to the judge and we don't think we are going to be fined," he said.

Jeffrey Greenstein, professor of neurology at Temple School of Medicine at Philadelphia, told Reuters he shared Biogen's concerns over the way the study was carried out.

He said it was not properly blinded and was therefore subject to bias, as patients knew which drugs they were on.

The row continued after study investigator and New York professor of neurology Patricia Coyle presented the results to World Neurology Congress.

During questions from the floor, one neurologist criticised the "haste and serious bias" of the open-label study and questioned how could have confidence in the results. Coyle said the criticism was "ridiculous".
 

ANALYSTS CAUTIOUS

Financial analysts had expected the new data to support Serono's claim that Rebif has some advantages over Avonex and that the market would take the news positively.

But they were wary on whether it would suffice to help Serono break Avonex's "orphan drug" protection, what kind of the label the drug could expect, and whether the data would add anything to existing market expectations for the product.

Orphan drug status is designed to promote development of medicines to treat rare diseases or conditions by protecting them from competition for certain periods.

UBS Warburg said the data were better than it had expected, which would heighten expectations Serono could carry the day.

"However, despite very positive six month-data, we continue to be cautious. The FDA decision is politically sensitive, and thus has the potential to disappoint unexpectedly," it said.

(Additional reporting by Richard Woodman and Toni Clarke in New York)