One Less Oral MS Drug to Worry About

Merck KGaA's oral multiple sclerosis drug, cladribine, is dead.

Novartis (NYSE: NVS  ) , Biogen Idec (Nasdaq: BIIB  ) , Teva Pharmaceuticals (Nasdaq: TEVA  ) , and Sanofi (NYSE: SNY  ) -- which all have oral multiple sclerosis drugs on the market or in development -- can breathe a sigh of relief.

Then why did they all trade flat yesterday after German Merck killed the program? Because there are still four competitors battling to be on top in the oral multiple sclerosis market.

That, and investors had mostly written off cladribine. The drug was only on the market in Australia and Russia, where it went by the name Movectro. The Food and Drug Administration and European regulators both turned down the drug. The prospects for eventual approval in the major markets were unclear at best.

Rather than pump more money into cladribine with no certainty that regulators would ever view its risk-benefit profile favorably, Merck decided to halt development and move on. Competitors won't even have to worry about dealing with cladribine in Australia and Russia because Merck is pulling it from those countries.

Novartis' Gilenya is the only oral multiple sclerosis drug approved to slow the progression of the disease. Acorda Therapeutics' (Nasdaq: ACOR  ) Ampyra is taken orally but only treats symptoms. Other drugs used to slow the progression like Biogen and Elan's (NYSE: ELN  ) Tysabri and Teva's Copaxone have to be injected or infused.

But Gilenya isn't likely to keep its monopoly for too long. Biogen is developing BG-12, which looked really good in clinical trials. And Teva's laquinimod and Sanofi's teriflunomide also likely have data that's good enough to get on the market.

Which drug will win the battle in the market remains to be seen. BG-12 seems to have the best data, and Biogen has plenty of experience selling multiple sclerosis drugs. But don't expect Novartis to roll over and die. Front-runner status is typically worth something in marketing battles no matter how many competitors make it that far.

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