Wednesday June 12, 07:03 PM
Biogen has cut its Q2 and full-year earnings targets due to weak sales of its flagship drug, Avonex.
Biogen's announcement is a major blow, since the multiple sclerosis drug is critical to the company's short to mid-term growth prospects. Although Biogen blames a weakening overall market for multiple sclerosis drugs, it looks like - as Datamonitor predicted - the truth has more to do with the new entry and high uptake of Serono's Rebif.
US biotech Biogen has cut its Q2 and full-year earnings targets due to weaker sales of its multiple sclerosis drug, Avonex, which accounted for $972 million or 93% of the company's total sales in 2001.
This is the second time in two months that the company has cut its Q2 sales forecast for Avonex, this time by $20 million to between $170 million and $180 million. For the full year, the company now expects Avonex to generate $730-$755 million, down from its April forecast of $1.15 billion.
Biogen has blamed the shortfall in Avonex sales on a weakening overall market for multiple sclerosis drugs and 'inventory adjustments' by US wholesalers. But Datamonitor believes the truth behind the shortfall lies primarily in strong competition from Serono's rival drug Rebif, which received FDA approval for the treatment of relapsing forms of multiple sclerosis on March 7.
Following Rebif's US approval, many analysts believed that Serono would not be able to convince physicians and patients of Rebif's superior efficacy over Avonex. Although they thought Rebif's launch would have some negative impact on Avonex sales, they expected Rebif's entry would be more likely to negatively impact the sales of Schering AG's Betasteron and Teva's Copaxone.
However, according to Datamonitor's primary research, European physicians believe that high doses of Rebif are more efficacious in severe forms of relapsing remitting MS - as well as secondary progressive MS (through off-label use) - than Avonex. European physicians are also prescribing Rebif for progressive MS, a more severe form of MS that affects up to 45% of patients. These comparative clinical factors and perceptions underlie the poor performance of Avonex.
So despite Biogen's claims of temporary contractions in the overall
MS market, Datamonitor believes Avonex will continue to lose market share
to Rebif - due both to its inferior efficacy at higher doses, and a high
regard for Rebif among physicians.
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