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Multiple sclerosis drug Tysabri is arguably the most important drug to both Biogen Idec (Nasdaq: BIIB ) and Elan (NYSE: ELN ) . It makes up essentially all Elan's sales after selling its drug- delivery technology to Alkermes. Tysabri comprises only 22% of Biogen's top line, but it's the fastest-growing drug of the top three. Sales of Tysabri grew 14% year over year, while Avonex and Rituxan grew 3% and 11%, respectively.
Tysabri is at a crossroads, an intersection that investors should be watching very closely. So far, though, the drug has taken the high road.
You'll recall that Tysabri was pulled off the market after reports of progressive multifocal leukoencephalopathy, or PML. The FDA decided the drug's benefit justified the risk of PML, and Biogen and Elan were allowed to resume selling the drug. Since then, especially after more cases of PML were reported, the duo has been working on a way to stratify the risk to make patients more comfortable taking the drug.
Earlier this year, the FDA approved Quest Diagnostics' (NYSE: DGX ) test for the John Cunningham, or JC, virus, which causes PML in patients with weakened immune systems like those taking Tysabri. No JC virus, no PML. At least that's how it seems; Biogen is running a prospective study to confirm the hypothesis.
With the new diagnostic available for most of the quarter, more than 1,900 net new patients went on therapy. More importantly, Biogen characterized discontinuation rates as "stable quarter over quarter." Since 50% to 60% of patients have the JC virus present, you could imagine they'd jump ship. Some certainly will, although it doesn't look like a major issue at this point.
Interestingly, the number of newly diagnosed patients who have never been treated for multiple sclerosis increased from a low-single-digit percentage to the high single digits this quarter, probably because doctors can be more certain that the virus isn't present to produce PML. Moving earlier into the disease progression to compete with Bayer's Betaseron, Teva Pharmaceuticals' (Nasdaq: TEVA ) Copaxone, Rebif from Merck KGaA and Pfizer (NYSE: PFE ) , and other first-line therapies is probably the easiest way to pick up sales.
High road indeed.
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