Tecfidera, a new drug from Biogen Idec (BIIB) for treating adults with the relapsing forms of MS (multiple sclerosis), had a successful launch. According to the market research firm IMS Health, Tecfidera outperformed all other MS drugs in the first 3 months after launch.
In the second quarter Tecfidera generated $192 million of Biogen Idec's $1.4 billion revenues. Some analysts predict that it could eventually bring in more than $4 billion a year in world-wide revenue. Optimism is reflected in the fact that the consensus projection for sales of the drug in 2018 has increased by 24 percent since this time last year.
The success has also prompted a major shift in how multiple sclerosis is treated.
Interim analysis of the long-term extension study Endorse showed that Tecfidera maintained its effect in reducing disease activity in patients treated for four years. No new or worsening safety signals were observed in patients who had been on the drug for up to six and a half years.
The Endorse extension study followed patients who had taken part in two major Phase III trials that led to the U.S. approval of Tecfidera. In addition, a separate analysis of the Phase III Define and Confirm trials revealed that the drug significantly reduced MS relapses in new-to-treatment patients, while delaying the overall progression of the disease.
The results were presented in October at the ECTRIMS (European Committee for Treatment and Research in Multiple Sclerosis) conference in Copenhagen, Denmark. Since MS is a chronic, life-long disease, physicians and patients need the assurance that Tecfidera sustains efficacy and safety over long-term, which these studies have provided.
In the Define trial, Tecfidera dropped relapses by 53 percent and reduced the likelihood of disability worsening by 38 percent compared to placebo. The impact was robust on MRI with 90 percent less new contrast activity.
In the Confirm trial, the twice-a-day dose of Tecfidera lowered relapses by 44 percent compared to placebo. In a comparison group of patients in the trial, Copaxone, which is made by Teva (TEVA), reduced relapses by 29 percent. The difference between Tecfidera and Copaxone was not statistically significant and the trial was not set-up to prove a difference between the two treatments.
Tecfidera is an oral formulation of dimethyl fumurate, which is a component of the drug Fumaderm, used to treat psoriasis in Germany. The starting dose is 120 mg twice a day for 7 days and then 240 mg twice a day. Earlier trials with only once-a-day dose did not have a significant impact on relapses so the medication must be taken twice a day.
During clinical trials a discovery was made that the drug is effective at a lower dosage than the 700 milligrams given at earlier trials, and the dosing regimen ultimately "qualified as an invention" before the U.S. Patent Office.
In March the U.S. Patent Office granted a 15-year patent protection for the 480-milligram daily dose for dimethyl fumarate, the active ingredient in Tecfidera, expiring in 2028. The company previously held three patents in the U.S. and Europe, but those patents expire in 2020.
One obstacle remaining is marketing in Europe. Some believe European sales will eventually account for 40 percent of Tecfidera revenues, therefore securing the drug against generic competition is important.
Biogen has delayed the European launch because it wishes to clarify certain data protection and market protection issues. Data protection is a period of time during which a competitor cannot file an application using data generated by the originator drug.
Market protection is the time during which a generic or biosimilar therapy cannot be marketed even if the product has been approved. Market exclusivity means that a drug similar to a treatment that exist for an orphan disease cannot even be validated by the regulatory agency.
A spokesperson said Biogen thinks it is entitled for 10 years of exclusivity for Tecfidera in the EU under the "Independent Development" principle. The EMA will announce its decision on exclusivity at the time of the approval.
At the heart of Biogen's patent issues in Europe is the fact that the active ingredient, dimethyl fumarate, is already present in the marketed psoriasis drug Fumaderm, which Biogen owns and markets, and which was approved in Germany in 1994. For that reason the drug could face challenges regarding its eligibility to data and market exclusivity.
If Tecfidera is not granted exclusivity through new active substance status or the Independent Development principle, Biogen will only have patent protection in the EU rather than protection against competitors using its MS data for generic regulatory filings. The company's latest EU patent (EP 1131065) expires in 2019 and is related to the formulations of dimethyl fumarate.
Compared to the other two oral treatments available on the market, Tecfidera's side effects are milder than Aubagio's from Sanofi (SNY), which has known liver risks or Gilenya from Novartis (NVS), with heart-rate and brain damage issues.
And its efficacy is better than some, but not all, MS drugs. In its two big studies, it decreased the rate of MS relapse by 49 percent, less than the 55 percent and 61 percent achieved by Gilenya and Biogen Idec's Tysabri, but much better than the 20-30 percent reduction seen with existing drugs. Tecfidera is priced at $54,900 per year, a little less than Gilenya's $58,000 sticker.
Copaxone from Teva could be the main loser in the multiple sclerosis treatment shift according to a report by Credit Suisse entitled "Multiple Sclerosis It's a Revolution."
Copaxone is injected daily in a dose of 20 mg per day and injection site reactions are a frequent complaint involving pain, redness, soreness, and swelling. Teva is asking FDA approval for a reformulated version of the drug in a 40mg dosing which would allow a less frequent, three times a week injection schedule.
Credit Suisse predicts that the annual sales of Copaxone may fall 90 percent from about $4 billion in 2012 to less than $400,000 in 2019. It will lose market share against Tecfidera, which may reach sales of $5.2 billion annually by 2019, and Novartis's Gilenya, with projected sales of $3.2 billion by 2019. Copaxone will also face generic competition after its patent expires.
Synthon, a private Dutch biopharma, has filed a formulation patent in an effort to develop a generic version of Tecfidera.
The patent filed with the WIPO (World Intellectual Property Organisation) and the particles are designed to release the active substance in a controlled manner so that, after oral administration, it is released in the upper gastrointestinal tract in a minimum amount.
XenoPort (XNPT), a small U.S company, released results from three early studies of its drug XP23829, a novel fumaric acid ester compound and a prodrug of MMF (monomethyl fumarate). The drug is being developed as a treatment for relapsing-remitting multiple sclerosis and psoriasis.
Tecfidera is also a prodrug of MMF. A prodrug is an inactive compound that, after administered, is activated in the body by metabolic processes.
The revolution in MS treatment is under way on two fronts: a shift in the way the drug is delivered and newer medicines being developed focusing on the substance of the disease instead of just modifying its symptoms.
It is estimated that the share of oral therapy will increase four times to nearly 40 percent of the MS market by 2017, driven by new entrants such as Tecfidera and others. Intravenous therapies, such as Tysabri from Biogen, due to their efficacy, also expected to grow into a 20 percent share of the market.
Injectable therapies like Copaxone, Avonex and others, are projected to decline by roughly half of the current usage by 2017.
New directions Anti-Lingo-1, also known as BIIB033 from Biogen, is the first candidate to repair neurons damaged by MS. Two Phase I trials have shown that the antibody can promote spinal cord remyelination (repairing the protecting sheath) and axonal integrity and it is safe and well-tolerated.
Anti-Lingo-1 is now in two Phase II studies and Biogen sees great potential in combining it with Biogen's stable of immunomodulators. Every MS patient is different and the goal is to develop a personalized approach to treatment.
- For the second quarter Biogen reported total revenues of $1.7 billion, an increase of 21 percent compared to the second quarter of 2012. Non-GAAP net income was $549 million, an increase of 25 percent.
- Earnings per share were $2.30, an increase of 26 percent over the second quarter of 2012.
- Sales were driven by Avonex ($774 million), Tysabri ($387 million), Tecfidera ($192 million) and Rituxan ($289 million).
- As of June 30, 2013, Biogen Idec had cash and cash equivalents totaling $775 million.
- In the past 52 weeks the stock price ranged from $134.00 to $248.95.
- A strong start for Tecfidera in the U.S., as well as approvals in Canada and Australia strengthened Biogen's leadership in the treatment of multiple sclerosis.
- In October broker Leerink Swann maintained an Outperform rating on Biogen and raised the price target to $300.00 from $286.00. Recent analysts' ratings are generally positive for Biogen, 16 Strong buy and Buy, 11 Hold and zero Underperform or Sell, as gathered by Thomson/First Call.
In spite of the recent weakness in the stock price, management appears to have a lucky hand; the company is strong and has a bright future.