Last November, I examined five experimental drugs that appeared as if they had all of the tools necessary to become life-changing blockbusters from a financial and quality of life perspective. Yesterday, the first experimental drug I highlighted from Biogen Idec (BIIB +2.02%) was approved by the Food and Drug Administration as a first-line treatment for relapsing MS.
Pardon the cliche, but I believe the greatest thing since sliced bread has just been bestowed upon MS patients whether they realize it yet or not.
Greater efficacy with fewer side effects is possible!
Tecfidera -- previously known as BG-12 in trials -- was studied in two different clinical trials known as Confirm and Define. In its Confirm study, Biogen noted that its pill, administered twice daily, reduced the rate of MS relapses by an impressive 49%, and was associated with a 71% to 99% drop in new or expanding lesions in both trials.
What's truly unique about Tecfidera is its adverse events profile, which demonstrates the promise of fewer side effects with better efficacy. The most common side effects exhibited by patients on Tecfidera were flushing and gastrointestinal events, which often resulted in very low trial dropout rates. Biogen's new medication could also lower lymphocyte counts in patients, according to its press release.
However, compare this to Novartis' (NVS +1.49%) Gilenya or Sanofi's (SNY 0.13%) Aubagio and you'll get a much clearer picture why Biogen's oral medication appears superior.
Gilenya, which is approved as both a first-line and second-line MS treatment within the U.S. and comes in pill form as well, has the potential to cause serious cardiovascular problems through slowing a patients' heart rate, can lower lymphocyte counts (similar to Tecfidera), and can potentially lead to macular edema or liver problems. Sure, it's a once-daily pill compared to Tecfidera, which is required to be taken twice a day, but the side effects are night-and-day visible to me.
Aubagio, another pill-based drug from Sanofi, comes with even harsher warnings in the form of an FDA black box warning label. The warning specifically notes that Aubagio can cause severe liver problems that can lead to death. Additional side effects for the second-line treatment include kidney problems, high blood pressure, and breathing problems.
When given the choice of these three drugs, even with Tecfidera's $50,000-$55,000 annual price tag, according to RBC Capital Markets analyst Michael Yee, I can almost assure you physicians and patients with any complication potential are going to opt for Biogen's therapy.
Biogen's MS-sector domination
But, Biogen isn't done there. The growing biotech behemoth recently paid $3.25 billion to acquire a full working interest in IV-based MS therapy Tysabri from Elan (ELN +0.00%). The cash gives Elan the working capital to start over from a relatively empty portfolio while giving Biogen the chance to challenge Novarits, Sanofi, and Teva Pharmaceuticals (TEVA 1.36%) in the MS arena.
Trust me, there's little love lost in the MS sector with Teva's $4 billion MS drug, Copaxone, set to come off patent in two years. In fact, Teva had tried, unsuccessfully, to delay the FDA approval of Tecfidera on the grounds that there were signs of renal toxicity in its animal studies. As you can guess by yesterday's approval, Teva didn't win that argument and could now stand to lose Copaxone sales long before generics hit the market in 2015.
Now, it's up to Biogen to successfully price and launch Tecfidera, as well as get this revolutionary capsule approved in the EU where the Committee for Medicinal Products for Human Use (CHMP) recommended approval of the drug last week. Assuming Biogen doesn't pull a Dendreon and completely blow the launch, and Tecfidera gains approval from the European Medicines Agency in the second-quarter, we could be looking at better than $4 billion in worldwide sales by 2017.
That is one mighty fine slice of bread if I don't say so myself!
