Biogen, and All of Biotech, Wait Anxiously for Amevive Verdict
By Adam Feuerstein
Staff Reporter
05/20/2002 07:12 AM EDT
There is little debate about the efficacy of Biogen's (BGEN:Nasdaq - news - commentary - research - analysis) experimental psoriasis drug, Amevive -- it works. But is it safe -- or at least safe enough to pass muster with U.S. drug regulators?
This is the difficult question that will dominate Thursday's meeting of a Food and Drug Administration advisory panel, charged with evaluating Amevive as a new treatment for the painful, scaly skin lesions that make psoriasis such a debilitating disease.
Biogen has a lot riding on the Amevive verdict, and it is one the biotech sector will watch with interest. The Cambridge, Mass.-based biotech firm is struggling. It needs Amevive to put some zoom back in its growth rate, especially now that sales for its chief moneymaker, the multiple sclerosis drug Avonex, are getting pinched by a competing drug from Swiss biotech rival Serono (SRA:NYSE - news - commentary - research - analysis).
Shares of Biogen have sunk 25% since March 8, the day Serono was cleared to sell its multiple sclerosis drug, Rebif, in the U.S. Last month, Biogen trimmed its 2002 earnings guidance and forecasts for Avonex sales growth, as it intends to boost spending to fight off Rebif. Biogen closed Friday at $42.03 a share.
As if Biogen isn't under enough pressure on its own, the Amevive decision should also have a wider impact on the entire biotech sector. Observers believe a thumbs up from the FDA advisory panel Thursday will be a positive signal that the risk-averse agency will approve first-in-class drugs -- even those with some hair on them. Of course, if Amevive is sent packing, it will join a long list of drug disappointments that have allowed biotech bears to run wild this year.
"Given all the bad news flowing through the biotech sector, I can't think of a bigger, more important, FDA advisory panel meeting than this one," says SG Cowen biotech analyst Eric Schmidt.
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To recap, Amevive is the first drug under FDA review that attacks psoriasis by suppressing a certain type of T lymphocyte, or immunity-boosting T-cells, responsible for triggering the outbreak of skin lesions. (Psoriasis looks like a skin ailment, but it's actually classified as an autoimmune disease.)
In late-stage tests, about 21% of patients taking Amevive via deep muscle injection were able to reduce their psoriasis symptoms by 75% -- a level considered the gold standard in psoriasis care. Amevive's benefits also last a long time -- upward of 10 months in some patients.
Safety Concerns
Sounds great, but as always, there's a catch. In this case, the T-cell suppression caused by Amevive raises considerable safety concerns. Psoriasis patients may feel better because their skin lesions disappear, but with a lowered immune response, do they become more susceptible to infections? This question is especially troublesome for drug regulators because psoriasis is a chronic condition, which means that, conceivably, patients would be taking Amevive, off and on, for the rest of their lives.
Biogen has conducted studies that allay some of the safety fears, the company says. Patients taking Amevive were at no greater risk of infections than patients taking a placebo, and the overall health of the immune system's response was equal in both groups. But because Amevive is an entirely new class of psoriasis drug, it's simply not known how much faith FDA regulators will place in these safety studies. It's entirely possible that regulators will ask Biogen to test the drug on more patients, for longer periods of time, before they're comfortable giving the drug the green light.
"The panel meeting will be tough because you're talking about depleting a patient's T cells to treat a non-life-threatening disease," says Robertson Stephens biotech analyst Mike King. "The decision will come down to this: Do the drug's benefits outweigh its risks?" King has no rating on Biogen.
Given the foundering biotech sector and the FDA's recent track record, it should come as no surprise to hear that the odds aren't exactly stacked in Biogen's favor.
"At Biogen's current level, I think the market is pricing in disappointing news," says SG Cowen's Schmidt. "The stock could move up big if Amevive is approved."
But while Schmidt is inclined to be bullish on Amevive's chances, he's not confident enough to predict victory Thursday. "I give it a better than 50-50 chance, but that's about all I'm willing to say," he says. Schmidt rates Biogen buy, and his firm doesn't do banking for the company.
Investors will get their first read on the FDA's Amevive stance Wednesday, when the agency's briefing documents are released on its Web site. The advisory panel meeting and vote will take place on Thursday. The panel's recommendation will then be forwarded to the full FDA for a final decision, expected by August. The full FDA is under no obligation to follow the panel recommendation but usually does so. |
