Watch stocks you care about
The single, easiest way to keep track of all the stocks that matter...
Your own personalized stock watchlist!
It's a 100% FREE Motley Fool service...
Times are a-changing. This has been a big year for multiple sclerosis drugs. And 2013 looks like it'll be the start of a major inflection point in the space.
The market is currently ruled by Teva Pharmaceuticals' (NYSE: TEVA ) Copaxone, Rebif -- marketed by Pfizer (NYSE: PFE ) and Merck KgaA -- Biogen Idec's (NASDAQ: BIIB ) Avonex, Bayer's Betaseron, and Novartis' (NYSE: NVS ) Extavia, which is the exact same drug as Betaseron sold under a different label (the back story, if you're interested, can be found here).
They all have to be injected, which is a turnoff to newly diagnosed multiple sclerosis patients. But they've been around awhile, and doctors have a lot of experience with their ability to slow down the progression of the disease.
Biogen and Elan (UNKNOWN: ELN.DL2 ) sell Tysabri, which has to be infused at a doctor's office. Despite efficacy that looks better than the injectable drugs, a potentially lethal side effect pushed the drug to use as a second-line therapy. This year, the companies developed an assay to identify patients more likely to develop the brain infection called progressive multifocal leukoencephalopathy, which seems to have invigorated sales for patients who test negative.
2013: The year of the oral MS drug?
2010 certainly wasn't. That's the year Novartis' (NYSE: NVS ) Gilenya was approved. As I predicted at the time, it took a while for sales of the drug to take off. But they finally have. Sales through the first nine months of the year nearly tripled over the same period in 2011, and it looks like the drug will surpass $1 billion in sales this year.
Sanofi's (NYSE: SNY ) oral drug Aubagio was approved by the Food and Drug Administration earlier this year. It may have an advantage over Gilenya, which has run into some safety issues, but its efficacy leaves something to be desired. In one trial, it failed to beat injected drug Rebif.
The big threat to Gilenya and Aubagio is likely to come from Biogen's BG-12. The efficacy looks to be the best of the three. Investors were expecting a decision from the FDA this month, but the decision was extended by three months. Assuming it isn't anything more serious and the FDA just requested additional information during the review process -- a normal reason for delaying a decision -- an approval still seems pretty likely.
Teva also has an oral multiple sclerosis drug, laquinimod, but the company, in conjunction with the FDA, decided to run a third phase 3 trial, which will push a potential approval out a few years.
Injectables aren't dead
Despite the increasing use of oral medications, drugs that require needles to be delivered won't go the way of the dodo bird any time soon.
First and foremost, doctors are comfortable prescribing the drug. And with a progressive disease, efficacy should trump convenience for the most part.
Sanofi is betting that's the case. Its infused drug Lemtrada, which it got in the acquisition of Genzyme, is currently up for FDA review. After a paperwork snafu, it's expecting a second-quarter 2013 decision from the FDA. Given the clinical data to date, an approval looks likely.
The biggest threat for injectable drugs will likely come from direct generic competition rather than indirect competition from new brands. Momenta Pharmaceuticals (NASDAQ: MNTA ) , for instance, has challenged Teva's patent on Copaxone and is trying to get a copycat version of the complex drug approved by the FDA.
The older medications are on their way out, but it'll likely be a slow decline for the group rather than a mass switch to the newer medications.
2013 could see changes in the MS drug market, and here's another stock to keep your eye on. The Motley Fool's chief investment officer calls it his No. 1 stock for the next year. Find out which stock it is in our brand-new free report: "The Motley Fool's Top Stock for 2013." I invite you to take a copy, free for a limited time. Just click here to access the report and find out the name of this under-the-radar company.