Biogen Idec
(
BIIB
) and
Elan Corporation, plc
(
ELN
) recently announced that they are conducting a phase III study of
Tysabri for secondary-progressive multiple sclerosis ("SPMS").
The phase IIIb study, ASCEND (
A
S
tudy to
C
haracterize the
E
fficacy of
N
atalizumab on
D
isability in SPMS), will evaluate Tysabri's potential in preventing
the worsening of walking, hand movement and daily functioning in
SPMS patients. Biogen and Elan plan to enroll 850 SPMS patients
from 15 countries in the study. Patients will be randomized to
receive either intravenous Tysabri 300 mg or placebo once in every
four weeks for a span of 96 weeks.
Tysabri is approved in the US for relapsing forms of multiple
sclerosis ("MS") in patients who show inadequate response to or are
unable to tolerate other treatments. In the EU, Tysabri is approved
for highly active relapsing-remitting MS ("RRMS") in adult patients
who have severe RRMS or have failed with beta interferon
treatment.
On January 20, 2012, Biogen and Elan announced that the US Food
and Drug Administration ("FDA") approved a label change for
Tysabri. As per the updated label, anti-JC virus antibody status is
a risk factor for developing progressive multifocal
leukoencephalopathy ("PML"), a rare and life-threatening brain
infection. This step will enable doctors to assess the patients'
risk benefit matrix better.
We are pleased with Biogen and Elan's efforts to expand the
Tysabri brand.
Biogen and Elan have an agreement for the development and
commercialization of Tysabri. Under the terms of the agreement,
Elan markets the drug in the US and books the entire sales as its
revenues. Outside the US, Biogen is responsible for distribution
and Elan records its share of the profit or loss on these sales of
Tysabri as revenue. This collaboration agreement provides Elan with
the option to buy the rights of Tysabri if Biogen changes
hands.
Our Recommendation
We currently have a Neutral recommendation on Biogen, which
carries a Zacks #3 Rank (short-term Hold rating). Key products
Avonex and Tysabri should continue contributing significantly to
sales. BG-12 should help drive long-term growth. Meanwhile,
Biogen's restructuring initiative should help drive the bottom
line. We are also pleased with Biogen's intention to streamline its
pipeline.
However, we are concerned about the increasing competition in
the MS market in the form of
Novartis
' (
NVS
) Gilenya which is competing directly with Avonex and Tysabri. The
MS market could become more competitive with the entry of oral
treatments being developed by other companies.
BIOGEN IDEC INC (
BIIB
): Free Stock Analysis Report
ELAN CP PLC ADR (
ELN
): Free Stock Analysis Report
NOVARTIS AG-ADR (
NVS
): Free Stock Analysis Report
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