Ionis/Biogen Spinraza Approved For Spinal Muscular Atrophy

Ionis Pharmaceuticals, Inc.IONS and Biogen Inc. BIIB announced that the FDA has approved Spinraza (nusinersen), an antisense drug, for the treatment of spinal muscular atrophy (SMA).

While Ionis' shares were up 8.1% during Tuesday's pre-market trading session, shares of Biogen gained 4.1%.

Note that Ionis' year-to-date share price movement shows that the company has outperformed the Zacks classified Medical-Drugs industry. Specifically, the stock lost 13.8% during this period, compared with the 24.4% drop for the industry.

Meanwhile, shares of Biogen have outperformed the Zacks classified Medical-Biomedical/Genetics industry year to date. The stock has lost 6.2% during the period, compared to a drop of 25.2% for the industry.

Coming back to the latest news, the FDA approved Spinraza under Priority Review to treat both pediatric and adult patients. This makes it the first and only treatment to be approved in the U.S. for SMA, thus allowing it to tap a market with high potential.

Biogen plans to make Spinraza available to healthcare providers in the coming week.

The approval was based on positive results from multiple studies, including an interim analysis of the phase III ENDEAR study in patients with infantile-onset SMA, which demonstrated sustained clinically meaningful improvement in motor function compared to the untreated study participants, as well as open-label data on pre-symptomatic and symptomatic patients with SMA, or are likely to develop, types 1, 2 and 3.

Under the terms of the collaboration agreement with Biogen, Ionis earned a milestone payment worth $60 million following the approval of Spinraza in the U.S. The company is eligible to receive additional milestone payments of $90 million based on regulatory approvals in the EU and Japan. Also, Ionis will receive tiered royalties on Spinraza sales in up to mid-teens.

We remind investors that Spinraza is currently under review in the EU. The European Medicines Agency's (EMA) Committee for Medicinal Products for Human Use (CHMP) had granted Accelerated Assessment to the product.

Biogen has also submitted regulatory filings for Spinraza in Japan, Canada and Australia. Regulatory filings in additional countries are expected in 2017.

SMA is estimated to affect about 30,000-35,000 patients in the U.S., the EU and Japan. In the U.S., one in every 50 individuals, or approximately six million people, carries the gene mutation that causes SMA.

Both Ionis and Biogen carry a Zacks Rank #3 (Hold).

Key Picks in the Sector

A couple of better-ranked stocks in the health care sector include Vanda Pharmaceuticals Inc. VNDA and Heska Corp. HSKA . Both the stocks sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today's Zacks #1 Rank stocks here .

Vanda posted a positive earnings surprise thrice in the four trailing quarters with an average beat of 56.65%. Heska, on the other hand, posted a positive earnings surprise in all of the four trailing quarters with an average beat of 301.64%.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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