Monday, March 25, 2002

Biotech

Biomed rounds: Change in status for MS drug won't faze Biogen

By Adria Cimino

Although the Food and Drug Administration's approval of Serono's Rebif wasn't the best news for Biogen, it is hardly a catastrophe.

The FDA recently broke through the Orphan Drug status held by Biogen's Avonex, allowing the Swiss competitor into the U.S. market.

Both drugs are interferon treatments for multiple sclerosis, but their means of administration and dosage frequency are not the same.

Of course, Avonex is a $1 billion drug and represents the lion's share of Biogen's revenue, but that still doesn't mean the FDA decision will change the future of Biogen.

The reason?

Avonex's Orphan Drug status was set to expire next year. The FDA action just eliminated one year of market exclusivity.

With all of the scaling up and sales efforts Serono must initiate in the United States, it seems unlikely that its drug could do immense damage to Biogen's market share in just one year.

Whether Orphan status was lost this year or next year, Biogen would find itself in pretty much the same situation.

James Mullen, Biogen president and chief executive officer, recently spoke about the outcome at SG Cowen's annual health care conference in Boston.

"The FDA decision certainly was unfortunate," he said. "It's a very narrow decision. It's not good for the Orphan Drug (program)."

But Mullen said that Biogen already had been planning for Orphan Drug expiration. It has ramped up the U.S. sales force by 30 percent to a total of 85 sales representatives in the field.

The company is launching its competitive strategy a year early and was fully prepared to do so, Mullen said.

He wouldn't give any other details on how Biogen would remain ahead of Serono in the U.S. market, but apparently the Cambridge-based company has not had much of a problem in Europe, where the two drugs have been competing for years.

Avonex holds 35 percent of the European market, while Rebif has 28 percent. Other treatments make up the rest of the total.

Mullen said that Biogen's top goal is "to keep these people out of wheelchairs, and we've got the strongest data on that."

The FDA says it will break a company's Orphan Drug status to let a competitor into the market if the competitor's drug is more efficacious. It sounds simple and clear-cut, but it isn't.

Rebif shows a benefit in the relapse rate at 24 weeks.

Serono's study comparing the two drugs, showed that 75 percent of Rebif patients did not have a relapse; the number was 63 percent for Avonex patients.

Rebif, however, does not demonstrate this kind of benefit after six months of treatment.

Biogen argues that in spite of the early advantage of Rebif, Avonex provides a long-term safety and efficacy record.

Mullen said that Avonex is associated with a low occurrence of neutralizing antibodies, which lead to decreased drug efficacy.

Rebif patients developed these antibodies at a 12-fold higher rate than Avonex patients in Serono's study comparing the two drugs.

Avonex patients also developed fewer injection-site reactions and had zero percent occurrence of tissue injury, while Rebif patients had a 3 percent incidence of tissue injury.

Dr. Burt Adelman, Biogen's vice president of medical research, said now that all the data from Serono's head-to-head trial is available, the marketplace will decide which drug will prevail in the United States.

Biogen expects the percentage of prescriptions for Avonex and Rebif should begin to show doctors' reactions in the coming months.

The FDA's decision did not seem to be much of a surprise for Biogen executives, who appeared ready to roll out the company's new strategy immediately.

Losing Orphan Drug status was a disappointment and drove Biogen stock prices down somewhat, but one can't help but think that the event was a mere hiccup in the Biogen story.

The company has been preparing for this day for quite a while and is focusing efforts on two other products - one for multiple sclerosis and the other for psoriasis.

Rebif's entry into the U.S. market is good news for Serono. And for Biogen, the news isn't as bad as one might initially think.

Adria Cimino reports on biotechnology and medical devices. She can be reached at acimino@masshightech.com.