Biogen’s Tecfidera MS Drug Wins EU Agency’s Backing

Biogen Idec Inc. won European Union backing for Tecfidera, one of the first therapies for multiple sclerosis available in an easy-to-take pill that analysts say may generate $3.25 billion in annual sales.

Current MS drugs, including Biogen’s Avonex and Tysabri, are given by injection or intravenous infusion, and patient anticipation for Tecfidera may drive it to capture as much as 20 percent of the market within a year, according to Eric Schmidt of Cowen & Co. Sanofi’s oral MS drug, Aubagio, was also recommended for marketing authorization today in Europe.

Biogen’s drug, formerly known as BG-12, will follow Novartis AG’s Gilenya to the market in the EU as an oral option for the treatment of MS. Because of its safety profile and efficacy, Weston, Massachusetts-based Biogen’s Tecfidera may generate $3.25 billion by 2017, based on the average analyst estimate compiled by Bloomberg.

“This will probably be the No. 1 drug in MS,” said Michael Yee, an analyst with RBC Capital Markets in San Francisco, in a March 19 telephone interview. He recommends buying Biogen shares.

Biogen rose less than 1 percent to $178 at 4 p.m. New York time. The shares have increased 47 percent in the past 12 months.

Multiple Sclerosis

Multiple sclerosis affects an estimated 2.1 million people worldwide, causing symptoms ranging from limb numbness to blindness and paralysis, according to the National Multiple Sclerosis Society.

Biogen should be granted marketing authorization for the drug, the European Medicines Agency’s Committee for Medicinal Products for Human Use said in a statement today. The European Commission usually follows the committee’s advice.

Biogen’s stock has doubled since April 2011, when the company first reported positive data from a late-stage trial of Tecfidera. The results were better than analysts and investors had expected, and they were bolstered later that year with results from a second trial, dubbed Confirm.

The most common form of MS is relapsing-remitting, characterized by neurological attacks followed by periods of recovery. The studies together showed that Tecfidera reduced patients’ annual relapse rate by 49 percent when given either twice a day or three times a day, and cut the proportion of patients who relapsed by 43 percent at twice-daily dosing and 47 percent at three times daily compared with placebo.

Side Effects

Overall, side effects were similar across the placebo and treatment groups, with the most common adverse events associated with Tecfidera being flushing and gastrointestinal effects, the company said.

A decision on Tecfidera is due from the U.S. Food and Drug Administration by March 28. The drug was delayed by the FDA in October for three months without asking for additional studies. The agency said it needed more time to review the application, Biogen said.

Gilenya generated $1.2 billion in sales last year for Basel, Switzerland-based Novartis. U.S. and European regulators placed new safety precautions on the drug’s use last year after a three-month review triggered by the deaths of 15 patients. Doctors shouldn’t prescribe Gilenya to patients with a history of cardiovascular and cerebrovascular disease or who take heart-rate lowering medication, regulators said.

Gilenya Warning

Gilenya was approved in the U.S. in 2010 as the first oral treatment for multiple sclerosis, and cleared for sale in Europe in March 2011. It’s been known since the drug was approved that patients taking it may experience heart-rhythm disorders or a short-lived drop in their heart rates, and warnings about those risks were included on the label, the EMA said.

Sanofi’s Aubagio already is approved in the U.S. Though the drug has the advantage of being a pill, its “efficacy profile is not that impressive versus other oral compounds,” Asthika Goonewardene, an analyst for Bloomberg Industries in London, said in a telephone interview.

Analysts estimate Aubagio will have 2017 sales of 736 million euros ($953 million), while Gilenya sales are forecast at $2.8 billion, based on the average estimates compiled by Bloomberg.

Biogen may be able to start selling the drug soon in Germany, though it may take about a year for the company to attain reimbursement agreements in other EU countries, said Brian Abrahams, an analyst with Wells Fargo.

“We, and we believe most others, expect timely approval of BG-12 in the U.S. later this month,” Abrahams wrote in a research note today. The EU recommendation is “a positive, though generally expected development.”

(Updates with closing share price in fifth paragraph.)
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