Biogen (NASDAQ:BIIB), which just got nod from the FDA for its potential blockbuster hemophilia drug Eloctate last week, has also now cleared a major hurdle for a drug in its multiple sclerosis franchise.

Joint developers Biogen and AbbVie (NYSE:ABBV) announced Monday positive top-line results in the phase 3 clinical trial of daclizumab for MS. Assuming Biogen succeeds with its marketing pitch to regulatory authorities, the drug should be introduced to the MS market in 2016. Daclizumab has other applications, but with MS, it could conservatively generate U.S. sales of $256 million by 2018, according to Alex Arfaei, a BMO analyst.

Not much response
Biogen shares were up only fractionally -0.8% in morning trading on the news, while AbbVie shares actually slipped 0.3%. Notably, AbbVie is facing some big bumps ahead without Humira, and its executives have identified daclizumab as one of their top late-stage prospects,

Biogen stock's lack of response could be partially due to a ho-hum market day. Biogen also chose an unfortunate day to announce its first-quarter earnings, when the market was riveted with Gilead Sciences' best-launch-in-history drug Sovaldi. Otherwise, Biogen's revenue leaping 50% on another new MS drug (Tecfidera), might have gained a lot more interest. Overall, Biogen's Q1 sales hit $2.1 billion, a 50% increase year-over-year, despite some softening in the U.S. market for Avonex.

In terms of the future, both of Biogen's new drugs will cause an upheaval in their respective markets, but Eloctate could be where the big money is made.

Eloctate could post $1.5 billion in sales by 2019
Eloctate should be commercially launched in the U.S. next month, and sales estimates put it squarely in blockbuster territory. Six analysts polled by Reuters forecast $1.5 billion in annual sales by 2019.

Eloctate's success will pose a worrisome challenge to Baxter (NYSE:BAX), a company that announced its intention to break into two separate global health care companies in late March, amid analyst fanfare. The company is quite vulnerable to hemophilia competition from Eloctate. Baxter's current hemophilia A med Advate is a big seller for Baxter, and hemophilia sales make up more than 50% of Baxter's BioScience segment revenue.

Baxter and others will have to deal with Biogen as a hemophilia threat, according to Biogen. R&D head Douglas Williams told Reuters, "We see Alprolix and Eloctate as the anchor tenants in a growing franchise. We're in this space to stay."

Like Biogen's hemophilia B med Alprolix, green-lighted by the FDA in March, Eloctate cuts down the number of infusions needed to prevent bleeding episodes. Eloctate's opportunity may be larger, however, with the market for hemophilia A pegged at $6 billion.

Living like a normal person
Unfortunately for severe hemophiliacs, treatment can involve infusions every other day. From a patient's perspective, the need for constant infusions makes it almost impossible to live like a normal person. By contrast, Eloctate reduces the need for infusions to once or twice a week, reducing somewhat the stress on the patient. As cited by FiercePharma, Biogen executive Tony Kingsley has said that patients won't pay more for the added convenience of less-frequent dosing. If the company follows through on that, it will be much more likely patients will switch to Eloctate.

"Infusion frequency is a major challenge for people with hemophilia, and I believe Eloctate begins to address this burden while protecting against bleeding episodes," said Patrick F. Fogarty, M.D., director, Penn Comprehensive Hemophilia and Thrombosis Program.

One great result of the FDA approval is that pediatric use for Eloctate was supported. Results in 38 boys'ages two to 11 years showed that the drug was well tolerated. Hemophilia occurs in about one in 5,000 male births, but more rarely in females.

Now, there are additional drugs in development that may eventually come in to compete with Eloctate. But an analyst survey back in March said Eloctate would likely grow to command up to 37% of the adult market over the next few years--despite the coming competition.

Right now, Biogen has a couple of tigers by the tail. No money back and no guarantees, but with the strong recent performance of its MS portfolio, and a potential blockbuster about to launch, the stock could have a bright future.

 

Cheryl Swanson owns shares of Gilead Sciences. The Motley Fool recommends Baxter International and both recommends and owns shares of Gilead Sciences. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.