The news that US regulators have approved Novartis' multiple sclerosis pill Gilenya has hit Biogen Idec stock hard amid fears that its blockbuster injectable MS drugs Avonex and Tysabri could face a major slide in sales.
Hours after the US Food and Drug Administration approved Gilenya (fingolimod), Biogen issued a statement saying "there has been a desire within the MS community for an oral treatment for a long time, and the approval of Gilenya has made this a reality". However the company noted that "MS impacts each person differently and, until we have a cure, there should be multiple treatments available to address the individual needs of patients".
Extolling the virtues of Avonex (interferon beta-1a) and Tysabri (natalizumab), "both of which have been used in a broad range of patients worldwide", Biogen added that it also has "the most robust pipeline in the industry, with three late-stage clinical candidates that target multiple pathways thought to be critical in treating MS".
That pipeline is headed by BG-12, the biotech major's own oral therapy. Studies suggest the drug may have the potential to both reduce inflammation and promote neuroprotection and Phase III data is expected in 2011.
As for the Novartis pill, Biogen said patients and doctors "should consider not only efficacy, but safety, tolerability and long-term experience when choosing a treatment option'. It stressed that "the long-term safety profile of Gilenya has yet to be established and there is limited data for it in patients with certain common comorbidities".
Biogen concluded by saying "we agree with the FDA that there is a need for safety monitoring for Gilenya through a comprehensive risk evaluation and mitigation strategy (REMS). Furthermore, "as we enter an era where new therapies may have important safety concerns, we believe it is the responsibility of all companies bringing MS drugs to market to be rigorous in monitoring for these issues".
However analysts are saying that the REMS for Gilenya is not tough as had been expected. In a research note, JP Morgan's Alexander Hauber wrote that the label and REMS requirements "are probably the best possible outcome both Novartis and investors could have hoped for". There is no black box warning and while all patients must be observed for six hours after their first dose, because Gilenya can cause a drop in heart rate initially, heart follow-ups will not be required, and neither will lung capacity tests.
Biogen investors seem to think the predictions of Gilenya being an enormous seller are right and the shares ended the day down 5.8% at $54.86.