NEW YORK, March 2 (Reuters) - Shares of Biogen Inc rose Tuesday following a U.S. delayed 20 mins - regulatory setback for a multiple sclerosis (MS) disclaimer drug made by would-be rival Ares-Serono Group, analysts said.
Biogen, whose Avonex interferon drug for MS had 1998 sales of $395 million, was up 1-7/8 to 104-1/8 in afternoon trade on the Nasdaq.
Swiss biotech company Ares-Serono disclosed late Monday that the U.S. Food and Drug Administration had delayed potential marketing approval for Rebif, its interferon beta 1-a drug for MS.
MS is an autoimmune disease marked by damage to the myelin sheath that covers nerve cells. It can cause blurred vision, muscle weakness, spasticity and mood disorders.
Specifically, the FDA upheld "orphan" drug protection for Biogen's Avonex and for Betaseron -- an interferon product developed and marketed by Schering AG (quote from Yahoo! UK & Ireland: SCHG.F) subsidiary Berlex Laboratories and manufactured by Chiron Corp.
"The FDA has ... stated that Rebif may not be approved for marketing while orphan exclusivity remains in effect for Avonex or Betaseron," Ares-Serono said in a statement.
The FDA grants orphan drug status when a drug's target population is less than 200,000. The status provides for 7-year market exclusivity and certain tax exemptions.
Avonex loses the special status in 2003. Betaseron's will expire next year.
"The FDA's decision to uphold the orphan status of the two drugs already on the U.S. market means that Ares-Serono's drug probably won't enter the U.S. until 2003," said OrbiMed Advisors analyst Carl Gordon.
Gordon said he and other analysts had expected Ares-Serono to announce Friday how the FDA had ruled on its marketing application for Rebif.
When word had still not arrived by late Monday, he said investors assumed Rebif had failed to clear the FDA hurdle. "So they began buying Biogen" on the correct assumption it had shaken off a potential rival.
Hambrecht & Quist analyst Richard Van Den Broek said Rebif had posed "a potential strong downside" to Biogen's Avonex, which he said enjoyed a 60 percent market share of U.S. sales for MS drugs.
CIBC Oppenheimer analyst Matt Geller said Biogen shares had risen 6-1/8 Monday on well-founded anticipation of disappointing news later in the day for Ares-Serono's product.
Geller said Ares-Serono officials told analysts Tuesday in a telephone
conference call that the company had no plans to sue the FDA in an attempt
to overturn its decision.
Copyright © 1999 Reuters Limited.