Europe regulators reject Biogen drug
Amevive may not hit that market till 2005
By Jeffrey Krasner, Globe Staff, 2/21/2003
European drug regulators dealt Biogen Inc. an unexpected blow, requesting the Cambridge drug company to conduct additional studies on its psoriasis drug Amevive before it could be approved.
In response, Biogen yanked its request for approval, a move that delays possible European sales of Amevive until 2005 at the earliest. The company had won US Food and Drug Administration approval for the drug last month. Though European drug regulators have rejected drugs already approved by the FDA, such actions are rare. The regulators raised no new safety concerns about Amevive, according to Biogen.
The surprise rejection rattled investors, some of whom were already skeptical of Biogen's ability to meet optimistic sales projections for Amevive. The company's only other product is its multiple sclerosis treatment Avonex.
Biogen shares dropped $3.20, or 8.4 percent, to close at $34.96 on the Nasdaq Stock Market.
The company, which recently predicted it would sell $500 million of Amevive in 2005, said it now has to rethink its projections. In a conference call with investors, chief executive James Mullen said Europe would have accounted for as much as one-third of Amevive sales.
''I didn't think they could meet the $500 million number anyway, and without Europe it's just impossible,'' said Dr. Martin Auster, an analyst with SunTrust Robinson Humphrey Capital Markets. ''It cripples the drug not to be sold in Europe until '05 or '06.''
Sales at Biogen have exploded since 1996, when Avonex was approved. Last year, Biogen exceeded $1 billion in revenues, mostly on the strength of Avonex. But Avonex sales are peaking, and some analysts predict its overall contribution to the company's bottom line will decline.
Amevive was intended to become the firm's second blockbuster. A third drug, Antegren, is being developed with Elan Corp. of Ireland. That potential treatment, for multiple sclerosis and Crohn's disease, is still in clinical trials. The rejection by European regulators is particularly crucial to Amevive because other drug companies are seeking approval for several competitors. Amevive has an advantage as the first drug to reach the market, but part of that edge was taken away by the rejection.
Biogen still projects that it will sell $85 million of Amevive in the United States this year.
The rejection came just weeks after the FDA gave Biogen the go-ahead to begin sales of Amevive. A treatment consists of 12 weekly injections that will cost between $7,000 and $10,000.
The Committee for Proprietary Medicinal Products, a type of advisory panel to the European drug approval group, asked Biogen on Tuesday to conduct an additional clinical trial that would compare Amevive to existing treatments to the chronic and often serious skin disease. Such a trial could take years to complete, and took Biogen by surprise.
''This trial, which didn't look like a requirement for approval, suddenly now seems like it is a requirement for approval,'' said Amy McKnight, a Biogen spokeswoman. ''They want to see how Amevive stacks up against other approved therapies.''
In the conference call, Dr. Burt Adelman, Biogen's executive vice president of research and development, said, ''These trials are difficult to design and interpret.'' Adelman said it is unclear why regulators want more information. The drug works by fighting the immune response that causes psoriasis patients to develop painful, itchy, and disfiguring scaly patches on their skin.
''Our concern about Amevive is how still the competition from Amgen and Abbott Laboratories is going to be,'' said Bill Tanner, an analyst with Leerink, Swan & Co. in Boston. ''Based on the work we've done with physicians, we weren't big believers in the $500 million revenue number to begin with.''
Mullen, Biogen's chief, said the company would present new financial projections for 2004 at its next quarterly conference call.
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