We recently reiterated our Neutral recommendation on
Biogen Idec
(
BIIB
). Biogen is the market leader in therapies for the treatment of
multiple sclerosis (
MS
). We believe the company will continue to retain a leading
position in the MS market.
Biogen's largest product, Avonex, posted sales of $2,518.4
million, up 8.4%, in 2010. We expect Avonex to continue
contributing significantly to the top-line thanks to price
increases, focused marketing effort, expansion into new markets and
positive clinical data.
Meanwhile, Tysabri, the company's second MS product, continues
to see an increase in patients despite carrying a "black box"
warning for the risk of progressive multifocal leukoencephalopathy
(
PML
) and other cautionary language. Tysabri posted $1.2 billion in
sales in 2010. Tysabri's launch in new markets like India, Brazil,
Argentina, the Middle East and Southeast Asia among others should
help drive growth. Tysabri sales should reach $1.5 billion in
2011.
We are also pleased with Biogen's efforts to consolidate its
position in the MS market. The most promising candidate in the
company's MS pipeline in BG-12, which could become a leader in the
oral MS market once launched. With impressive phase III data in
hand, Biogen expects to file for approval in the first half of
2012.
We believe BG-12 could become a leader in the oral MS market
once launched. Biogen is also studying BG-12 as a combination
therapy. Other interesting candidates in the MS pipeline
daclizumab, which is being developed in collaboration with
Abbott Labs
(
ABT
), and PEGylated interferon. Biogen's pipeline also has candidates
for other ailments like amyotrophic lateral sclerosis (ALS), or Lou
Gehrig's disease, and hemophilia.
While we are impressed with Biogen's progress with its MS
franchise, our biggest concern remains the competitive threat posed
by
Novartis'
(
NVS
) Gilenya that was launched in early October 2010. Gilenya is
competing primarily with Avonex and Tysabri for a share of the MS
market. We remain concerned that being the first oral treatment to
have gained US approval for the treatment of MS, Gilenya could take
share from Biogen's products.
Also, we expect some cannibalization of Avonex sales once BG-12
is launched. Longer-term, Biogen's MS products could face
additional competition as companies like
Sanofi
(
SNY
) are working on developing MS treatments. The entry of additional
competitors could make it challenging for Biogen to maintain its
position in the MS market.
ABBOTT LABS (
ABT
): Free Stock Analysis Report
BIOGEN IDEC INC (
BIIB
): Free Stock Analysis Report
NOVARTIS AG-ADR (
NVS
): Free Stock Analysis Report
SANOFI-AVENTIS (SNY): Free Stock Analysis
Report
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