By John Carroll and Ryan McBride
Just a day ahead of the FDA's deadline, Biogen Idec ($BIIB) grabbed an FDA approval for Tecfidera (BG-12), its oral multiple sclerosis blockbuster widely expected to dominate the growing, multibillion-dollar market.
Tapped by a number of analysts as a heavyweight champ capable of earning $3 billion or more a year, the therapy has been a central feature in George Scangos' turnaround campaign at Biogen Idec. Although inherited from a previous management group, Scangos and his team have aggressively pushed through the final stages of development while orchestrating a string of events--including the recent acquisition of the remaining rights to Tysabri--that makes the company a major player in MS.
Biogen's stock price surged past the $182 mark this afternoon, record territory for the big biotech. Before the fresh FDA decision on Tecfidera, Biogen had endured a long dry spell of U.S. approvals on new MS drugs dating back to when the agency initially sanctioned Tysabri in 2004.
Biogen Idec's investigators have published some impressive late-stage data on Tecfidera, demonstrating that the drug could cut the annual MS relapse rate by about half. The twice-daily dose was associated with a drop in new or expanded lesions by 71% to 99%. And there was a 38% reduction in progression to disability.
The data has been so strong that most analysts give Biogen Idec the inside track on Sanofi ($SNY), which has recently landed approval for Aubagio and is likely to follow that soon with an OK for Lemtrada. Novartis, which makes the oral MS drug Gilenya, is also likely to feel Tecfidera elbowing into its market. But this is the kind of disease that can be awfully hard to tackle. The more choices that exist for the $12 billion market, the better for patients. And that's a theme that the FDA picked up on in its announcement Wednesday afternoon.
"No drug provides a cure for multiple sclerosis so it is important to have a variety of treatment options available for patients," said Russell Katz, M.D., director of the Division of Neurology Products in the FDA's Center for Drug Evaluation and Research. "Multiple sclerosis can impair movement, sensation, and thinking and have a profound impact on a person's quality of life."
Biogen Idec is also likely to add a European campaign for Tecfidera soon. The European Medicines Agency's Committee for Medicinal Products for Human Use recommended the drug a few days ago, encouraging analysts who have projected that the treatment is likely to be a dominant player as the market grows to $20 billion by 2020.
"This is on the order of a Lipitor or something," Oppenheimer analyst Dave Ferreiro told the Boston Business Journal a few days ago. "It's hard to imagine a drug getting much bigger than that."
"We don't have the label," said International Strategy and Investment's senior managing director Mark Schoenebaum in a lightning quick response to the approval. "But the FDA press release seems to read as if there will be no issues (such as black box or onerous monitoring)."
In its release about the approval, the FDA recommends that doctors annually check white blood cell counts of patients on Tecfidera, which may cause decreaes in the cells and increase a patient's risk of infection. Yet there were no signs of increased infection rates in studies of the drug, the agency noted. And RBC Capital Markets analyst Michael Yee, in a note to investors, called the language on safety in the FDA release "very benign."
Biogen plans to reveal pricing information on Tecfidera in the next couple days, company spokeswoman Monique da Silva said in an interview. While there's no pricing data on Tecfidera available, Yee estimates that Biogen will seek a price of $50,000 to $55,000 per year per patient, which falls right between the annual cost of rival oral MS therapies Gilenya ($58K) from Novartis ($NVS) and Aubagio ($45K) from Sanofi ($SNY)/Genyzme.
Da Silva says that U.S. sales of Tecfidera will begin within a few days.
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- here's the press release
Editor's note: Updated with analysts comments and additional reporting by Ryan McBride.