BIIB
(my bolding - just talking my Elan book)
Biogen IDEC Inc.
Update; Positive Phase II Data from Oral Fumarate; Maintain Buy
BIIB announced Phase II results from its oral fumarate for the treatment of severe
psoriasis. 42% of patients on the highest dose achieved a 75% improvement in
their PASI score (PASI 75) versus only 11% on placebo at 12 weeks (similar to
Enbrel’s results in Phase III) -- a significant benefit. While the efficacy appears
positive, these are only preliminary Phase II results and we would await more data
before becoming too enthusiastic.
The trial was a double-blind, placebo controlled study enrolling 144 patients with
a baseline PASI score of 16-24 to one of 4 arms – placebo, 120mg, 360mg or
720mg. Patients were administered 6 pills/day including 2 in the morning, 2 in the
afternoon and 2 in the evening. Patients were taken off any systemic therapies at
least 4 weeks prior to dosing and were only allowed to use topical salicylic acid or
emollients during the trial.
The 360mg and 720mg doses displayed a significant benefit over placebo in PASI
75. GI AEs were reported in less than 5% of patients and all were mild or
moderate. GI tox was one of the limiting side effects for the first generation drug,
which is approved in Europe. The most common AEs with the current compound
included flushing, minor elevations of ALT and common/colds respiratory
infections. There were 3 SAEs – one elevated ALT (placebo), one death (720mg)
and one acute dsypnea (720mg) – none were thought to be related to study drug.
A 175 patient Phase III study was initiated in Europe in 3Q03 and BIIB expects it
to be completed by YE 2004. Depending on these results, the company intends to
begin a Phase III program in the US in 2005.
While the early results are encouraging, we remain a little concerned regarding the
ALT elevations as this drug will likely be developed as a chronic therapy (the data
on the percentage of patients with ALT elevations was undisclosed).
Antegren has the potential to convert Biogen IDEC from a decelerating growth
story with risk to estimates to one of accelerating growth and potential EPS
upside. Maintain BUY.
Our price target is $69, based on a P/E multiple of 38x off our fully diluted 2005
EPS of $1.80. Risks include a delay in Antegren approval, negative impact on
Rituxan sales due to changing reimbursement, greater competition for Avonex and
an unanticipated Avonex supply interruption.
Eric J. Ende, M.D.
Price: $57.01
Price Objectve $69.00
Price Objective Date 19-Feb-2004
Estimates (Dec) 2003A 2004E 2005E
EPS: $1.22 $1.40 $1.80
P/E: 46.7x 40.7x 31.7x
GAAP EPS: D$4.92 $1.14 $1.54
GAAP P/E: NM 50.0x 37.0x
Mkt. Value/ Shares
Outstanding (mn)
$20.900 / 361
Investment Rating Buy
Volatility Risk Rating High
Investment Opinion: C-1-9
Symbol/Exchange: BIIB / NASDAQ |
