Merck KGaA's oral multiple sclerosis drug, cladribine, is dead.
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'
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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Fool contributor Brian Orelli holds no position in any company mentioned. Click here to see his holdings and a short bio. The Motley Fool owns shares of Teva Pharmaceutical Industries. Motley Fool newsletter services have recommended buying shares of Elan, Teva Pharmaceutical Industries, and Novartis. 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.