Analysts - Company needs new drugs to buoy stock
by Jennifer Heldt Powell
Thursday, May 11, 2000
Sales of most new drugs peak within a few years of being released, but sales of Biogen's multiple sclerosis treatment, Avonex, are still climbing - though not as fast as the company hoped - five years after it hit the market.
The challenge now is for Biogen Inc. to maintain its share of that market while getting another major drug approved.
In addition to Avonex, the company receives revenue from a number of licenses including hepatitis B vaccines and diagnostic products.
But the company, based in Cambridge, will have to move more drugs into the market to retain the interest of investors, analysts say.
Biogen's next likely blockbuster medicine is a psoriasis treatment called Amevive.
The drug is headed into final-stage trials on the heels of promising stage-two results.
Already recruitment of patients for the trial is ahead of schedule.
James L. Vincent, Biogen's chairman and chief executive, said he believes this is because the second-stage trial results were so strong.
An estimated 2.5 million people seek treatment for psoriasis, an inflammatory skin disorder characterized by red, scaly, thick patches that can cause considerable discomfort.
But even if the drug is as successful as early studies indicated, it won't hit the market until 2002.
"That is an issue," said Elise T. Wang, an analyst with PaineWebber in New York.
"People like to see things nearer term."
And while Amevive is moving steadily along, last November Biogen had to halt trials for another drug, Antova, because of concerns that it could cause blood clots.
In all, trials for five diseases were shut down after patients developed complications. It's not clear, however, whether they were caused by the drug or by some underlying disease.
Other drugs in the pipeline include Adentri for congestive heart failure and gene therapy for liver and lung diseases.
Biogen took a hit on Wall Street this spring when first quarter 2000 sales came in lower than expected, and investors began looking at what lay beyond Avonex.
"It raised the specter of concern about slowing growth for the product," said Wang. "It's a matter of expectation vs. what's delivered."
Avonex sales rose 33 percent, to $174.6 million, but that was less than expected.
Analysts attributed the slowdown to competition, regulatory issues in Europe and a backlog of multiple sclerosis patients not getting in to see their doctors.
But the company is working on improvements to the drug, such as changing the delivery to an inhaler rather than an injection, which could give it a tremendous advantage.
Inhale Therapeutics Inc., of San Carlos, Calif., said recently it had started early stage trials on **an inhalant version** of Avonex.
In addition, a recent study indicated that the drug can help delay the onset of the disease.
"You would think that this would spur more of an interest in using the drug earlier on," Wang said.
An estimated 300,000 Americans suffer from multiple sclerosis and nearly 200 new cases are diagnosed every week in the United States.
Multiple sclerosis, a degenerative disease that affects the central nervous system, usually strikes people in their 20s and 30s. It causes a wide variety of symptoms, including fatigue, muscle weakness, temporary blindness or double vision and cognitive impairment.
In a four-year study cut short in February, the onset of multiple sclerosis was delayed in patients who were given Avonex after experiencing a symptom of the disease.
The study was so successful it was stopped so patients taking a placebo could be switched to Avonex.
"This allows us to file for a broadening of our label claims and increase the target market for Avonex," said James Mullen, Biogen's chief operating officer.
Biogen, one of the biggest biotech companies in the world, was founded in 1978 by a group of scientists.
It went public in 1983 but an initial rise in its stock price soured when profits failed to materialize amid internal rivalries.cw0
Vincent took over as chief executive in 1984 and began to shape Biogen into a full-service operation that would develop and sell drugs.
In June, Vincent will step back from the daily operations of the company and hand over the reins to Mullen, who will become chief executive. Vincent will stay on as non-executive chairman.
Biogen has 1,400 employees in laboratories in Cambridge and the Research Triangle Park in North Carolina, as well as offices in Austria, Canada, France, the Netherlands, Switzerland and Great Britain.
"We've demonstrated in many ways that we could operate at a very excellent
level on a worldwide basis as a fully integrated company," Vincent said.
"We've got a good history of generating novel therapies that have an important
impact on patients."