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Biogen Idec readies its next move

Company’s hopes for market dominance hinge on approval of oral MS treatment

Analysts said Biogen Idec’s latest drug could have sales of up to $6 billion annually if it gains regulatory approval.

Suzanne kreiter/Globe staff

Analysts said Biogen Idec’s latest drug could have sales of up to $6 billion annually if it gains regulatory approval.

WESTON — There’s been no shortage of drama at Biogen Idec Inc. in recent years.

The area’s largest independent biotech survived a proxy battle, replaced its top executive, and moved its headquarters here from Cambridge only to announce plans to return. The company also pulled a powerful multiple sclerosis treatment from the market, relaunched it, and turned the drug into a blockbuster that is ringing up annual sales of more than $1 billion.

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But the most climactic chapter in the company’s quest for dominance in MS drugs may be written this month when the Food and Drug Administration rules on Biogen Idec’s application to sell its first MS pill, called Tecfidera, in the United States. Most drugs that treat the autoimmune disorder have to be injected by needle or taken through an infusion.

Tecfidera has been highly anticipated by doctors and patients with MS, a disease affecting the brain and central nervous systems of about 400,000 people in the United States and 2.5 million globally.

“There is optimism about what [Tecfidera] could mean for MS,” said Dr. Timothy Coetzee, chief research officer for the National MS Society, a patient advocacy group in New York. “Having an oral treatment is important for people who have challenges tolerating injections. Based on the results from clinical trials, the adverse events are reasonably mild. There weren’t any safety issues that came out during the trials.”

Analysts believe Tecfidera, a capsule taken twice a day, could become the top-selling MS drug to date. Its effectiveness and safety in trials compare favorably with other treatments on the market, they say, but with less severe side effects.

“There’s very robust enthusiasm among the docs,” said Marko Kozul, senior biotechnology analyst for Boston health care investment bank Leerink Swann, which has surveyed physicians about the drug. “A lot of them are warehousing patients in anticipation of Tecfidera coming to market,” he said, referring to the practice of holding off prescribing other drugs or keeping patients on less aggressive treatments until a new and better one is approved.

If the FDA gives it a green light, Tecfidera could generate sales of $300 million for the last nine months of 2013, $1 billion in 2014 if the drug also wins European approval, and $4 billion worldwide in 2018, according to Leerink’s projections.

In 2020, sales could reach a staggering $6 billion, Leerink estimates. That would approach the revenues of previous top blockbusters such as cholesterol medicine Lipitor and heartburn pill Nexium.

By comparison, Biogen Idec last year posted sales of $2.9 billion from its lead MS drug Avonex and $1.1 billion from Tysabri, which prevents nerve damage in patients with relapsing MS. Avonex, approved by the FDA in 1996, was one of the first MS medicines. Tysabri won approval in 2004 but was temporarily taken off the market in 2005 after some patients died from a rare brain infection. The drug was relaunched in 2006, and Biogen Idec has since developed a test that helps predict which patients might be vulnerable to the infection.

Even after Biogen Idec starts selling Tecfidera, the company won’t have the MS pill market to itself. Two other pills were previously approved: Gilenya, marketed by Swiss drug giant Novartis AG; and Aubagio, marketed by the Genzyme division of French drug maker Sanofi SA.

Tecfidera would compete not only with those pills, but also with a class of interferons — protein-based drugs often called “platform treatments” for MS — including Avonex. There is also a risk of the “potential cannibalization of Tysabri” if doctors move patients with more severe forms of the disease from that drug to Tecfidera, said Leerink’s Kozul.

Partly as a hedge against declining Tysabri revenue, Biogen Idec last month agreed to pay $3.2 billion for the 50 percent stake in the drug held by its Irish partner, Elan Corp., which developed the treatment. Biogen Idec also agreed to make future contingent payments to Elan based on Tysabri sales.

Biogen Idec executives say it will be the first company to offer patients and physicians a potent lineup of drugs for a disease that affects people differently. The biotech is also working on a longer-lasting version of Avonex, as well as another MS treatment.

“This will help address the range of MS that doctors see among patients,” said Al Sandrock, Biogen Idec’s chief medical officer. “Having a broad array of treatment options is important. Patients welcome an oral therapy. Injecting yourself with a needle is an unnatural act.”

Biogen Idec has asked the FDA for a broad label on Tecfidera, meaning it could be used by newly diagnosed patients as well as those who have taken other MS drugs. “If we get a broad label, it should compete with all therapies, including some of our own,” Sandrock conceded.

The company already has assembled a sales force to call on neurologists in the United States and about 30 other countries. But FDA approval — and the drug label that comes with it — is needed before sales training on Tecfidera can be completed.

Once that happens, “We will be able to get supply into the channel in a very short period of time,” said Tony Kingsley, the Biogen Idec executive vice president for commercial operations. “MS is a very complex disease encompassing many subsets of patients. So we want to be prepared to focus on each of these subsets” in discussions with doctors who prescribe treatments, Kingsley said.

Shares of Biogen Idec have more than tripled to $176.72 on the Nasdaq exchange over the past three years, largely because of investor expectations that Tecfidera will be approved. But once Tecfidera starts being sold, investors will turn their attention to its performance.

They will also watch to see what premium Biogen Idec can command through the drug’s price, which has yet to be determined but is expected to be tens of thousands of dollars a month.

That could mean more drama for Biogen Idec over the next year.

In general, commercial and government payers on both sides of the Atlantic have been balking at the high prices charged for new drugs. As it sets the price of Tecfidera, the company has to be mindful of avoiding a public backlash, cautioned Kozul at Leerink.

“They should think about how to price that drug so they don’t dampen enthusiasm,” Kozul said. “We’re expecting a laser focus on Tecfidera by investors over the first nine months. The volatility around that could be dramatic.”

Robert Weisman can be reached at weisman@globe.com. Follow him on Twitter @GlobeRobW.
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