Biogen Idec Inc. (BIIB) declined the most in almost two months after the third-biggest biotechnology company said its experimental drug for amyotrophic lateral sclerosis failed to help patients in a clinical trial.
Biogen sank 1.4 percent to $147.86 at 4 p.m. New York time after saying it will end development of the medicine for ALS, also known as Lou Gehrig’s disease. It was the stock’s biggest one-day decline since Nov. 8. The shares of the Weston, Massachusetts-based drugmaker have gained 30 percent in the last 12 months.
Biogen’s drug, dexpramipexole, was in the third and final stages of clinical trials generally required for approval. It didn’t show any effectiveness in improving patients’ function or survival, Biogen said in a statement today.
“We (and most of the Street) had characterized this trial as a high risk trial that carried more upside than downside,” Mark Schoenebaum, an analyst with ISI Group in New York, wrote in a note to clients today. “But the sentiment hit is clearly real and important for a high-flying company that really has done no-wrong in years.”
ALS, known as Lou Gehrig’s disease for the New York Yankees baseball player who died from it more than 70 years ago, has no cure and no medicine has been shown to slow its advance for long. It affects about 30,000 people in the U.S., causing nerve damage that leads muscles to shut down progressively over three to five years until most patients die from respiratory failure.
The drug had showed hints of promise in earlier studies, exciting a community of patients with few medical options. There’s only one drug on the market for ALS, Sanofi (SAN)’s Rilutek, and it provides only a modest benefit in reducing the disease’s progression.
Phase 2 trials showed that after 12 weeks, people on the highest dose of dexpramipexole had about a 35 percent slowing of ALS progression compared with patients taking a placebo. The results prompted Biogen Chief Executive Officer George Scangos to highlight the drug at a presentation to investors last January at JPMorgan Chase & Co. (JPM)’s annual health-care conference.
“This is far from a long shot,” Scangos told the audience. “We are genuinely hopeful that we will be able to provide meaningful therapy for the thousands, tens of thousands, of ALS patients who right now have very little to help them.”
The phase 3 trial, which enrolled its first patient in March 2011, was filled within four to five months, half the time a trial of this size -- 943 patients -- would normally take. It was the fastest study enrollment in Biogen’s history.
A survey of investors in late December showed 46 percent expected positive results from the phase 3 study, ISI Group’s Schoenebaum said today. “Ninety percent expected it to be a small benefit.”
Schoenebaum estimated the drug would bring $100 million in 2016 revenue, and $400 million in annual sales by the end of the decade. “Thus the impact on our model of today’s failure is not material,” he said.
“This is a tough field,” Gilmore O’Neill, vice president of clinical development at Biogen and a physician who treats ALS patients, said in a telephone interview today. “We actually knew that when we went in. We are remaining highly committed to ALS and developing therapeutics.”
Biogen, which sells the multiple sclerosis therapies Avonex and Tysabri, is awaiting regulatory approval of its first pill for the disease, BG-12. The MS medicine could draw as much as $4 billion in revenue if approved, according to an October estimate from Cowen & Co. analyst Eric Schmidt.
Biogen today reiterated its commitment to ALS research, having started a partnership with Duke University and HudsonAlpha Institute to sequence the genomes of as many as 1,000 patients in the next five years. The company also started a research group collaborating with academic centers to identify new ways to treat the disease.
“We are continuously looking” at ALS compounds being developed outside the company, in addition to working on efforts within Biogen, O’Neill said. “Our belief about a disease like ALS is that you need to have that core effort ongoing and that you have to look around and be opportunistic. We want to take the best candidates based on data forward into these trials.”
Further data from the phase 3 study will be reported at a future medical conference, Biogen said.
“As a physician who has treated people with ALS, I hoped with all my heart for a different outcome,” Douglas Kerr, Biogen’s director of neurodegeneration clinical research, said in the statement. “While these results were not what we expected, we hope these data will provide a foundation for future ALS research.”
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