Rick,
As always...thanks for the detailed response to my questions about MEDI/BTRN.
Appears that Thursday will be an exciting day for Biogen...
"Biogen braces for ruling on key drug
Analysts anticipate tough questions for psoriasis therapy
By Ted Griffith, CBS.MarketWatch.com
Last Update: 3:41 AM ET May 18, 2002
CAMBRIDGE, Mass. (CBS.MW) -- Biogen will face its most important regulatory hurdle in years on Thursday when an influential advisory panel will review the venerable biotech firm's new treatment for psoriasis.
Biogen braces for FDA ruling on key psoriasis drug .
It may not be pretty.
Analysts say there's widespread concern among investors that the tenor of the meeting could be negative as members of the panel are likely to express doubts about the safety profile of the drug, called Amevive. Even analysts who believe Amevive will win the panel's backing expect that Biogen (BGEN: news, chart, profile) will face tough questions about how the drug affects the immune system.
"Panels are always contentious and this case won't be any different," said analyst Eric Schmidt at SG Cowen. "It's not going to be easy."
The advisory committee's recommendation on whether Amevive is suitable for commercial use will be pivotal for the drug and its maker Biogen. When it comes to deciding which drugs get approved, the Food and Drug Administration typically relies heavily on the advice of its panels, which are made up of medical experts.
"This is a huge deal for Biogen," said analyst Joseph Dougherty at Lehman Bros. "Amevive is critically important to the medium-term growth prospects of Biogen."
Biogen's stock will be halted for trading on the day of the meeting, as is common when a crucial drug is under review. When the stock opens again the next morning, it's sure to be a big mover -- it's just not clear yet in which direction.
Analyst Martin Auster at SunTrust Robinson Humphrey said Biogen's stock could soar up to $50 if the recommendation is positive and slide down to $32 if it's negative.
Shares of Biogen rose $1.48, or 3.6 percent, to close at $42.03 Friday.
Biogen's top executives have long touted Amevive as the company's next big product and key to expanding the biotech firm's business beyond a single blockbuster drug, multiple sclerosis treatment Avonex. The need to diversify beyond Avonex took on renewed significance in March when Swiss-based rival Serono won the right to market its MS drug, Rebif, in the United States. Analysts expect Rebif to be a major competitive threat to Avonex.
Between the pressure on Avonex and doubts about Amevive, Biogen's stock slumped to a nearly four-year low in recent days.
Safety concerns
As the May 23 advisory meeting draws closer, analysts are raising some concerns about the potential side effects of Amevive, which Biogen is hoping will be the first biotech drug approved to treat the skin disease psoriasis.
This past Thursday, analyst Jennifer Chao at Leerink Swann & Co. spooked investors when she said a single patient apparently developed a form of cancer called lymphoma after being treated with Amevive. Chao went on to add that it's difficult to draw conclusions about whether the cancer was caused by the drug. She said she continues to expect Amevive will win approval and be on the market before the end of this year.
Despite the analyst's overall positive comments, just raising the specter of a cancer-Amevive link was enough to drive Biogen's stock down by as much as 5 percent.
Analyst Eric Ende at Merrill Lynch said concern about Amevive centers around the drug's effect on the immune system, which helps protect the body from both infections and uncontrolled cancer cell growth.
Ende said the drug suppresses a type of disease-fighting white blood cell, known as a T-cell, and that "theoretically" could increase the risk of patients developing an infection or cancer.
Biogen spokeswoman Kathryn R. Bloom said the company has reviewed all of the results from testing of Amevive and has found nothing that ties the drug to "a pattern of opportunistic infections, malignancy or anything else outside of the norm." She noted that Amevive has been tested in more than 1,000 patients and that the drug has met its goals for safety and effectiveness.
Biotech graveyard
Even a hint of a safety concern could present an obstacle for Amevive because the FDA is likely to have very little tolerance for side effects when it comes to treatments for psoriasis, some analysts said. The FDA makes its decisions based on a classic risk-benefit analysis -- meaning that serious side effects would be acceptable in treatments for potentially lethal illnesses, such as cancer, but those same side effects would likely be unacceptable for non life-threatening diseases, such as psoriasis.
Psoriasis, a chronic condition marked by bumps and flaky, raised patches on the skin, can take a dramatic psychological toll on patients. In the most severe cases, it can be disfiguring.
But while acknowledging the disease's serious "psychosocial" consequences, Lehman Bros.' Dougherty said the FDA isn't likely to view psoriasis as a grave illness.
"My impression is that psoriasis is seen by the FDA as a really awful skin rash," the analyst said.
Dougherty said it's been challenging for biotech firms to come up with treatments for psoriasis because there is such little latitude for side effects. Moreover, he said the mysterious nature of the illness has confounded many biotech firms.
Doctors believe psoriasis is brought on by problems with the immune system, but the exact cause isn't well understood. The disease can also be unpredictable, flaring up and then quieting down without warning.
The mercurial nature of psoriasis makes it hard to know for certain whether it's a company's drug, or something else, that's putting a patient into remission in clinical testing.
Numerous biotech firms have struggled with psoriasis treatment. The latest casualty was Abgenix (ABGX: news, chart, profile), which announced Tuesday that it was dropping development of its psoriasis treatment after the drug produced lackluster results in mid-stage patient testing.
Genentech (DNA: news, chart, profile) and partner Xoma (XOMA: news, chart, profile) have been plagued by delays in their effort to win the FDA's OK for a psoriasis treatment.
"Psoriasis has historically been a biotech graveyard," Dougherty said.
Looking for hope
Biogen's fans, however, contend that all the pessimism about psoriasis treatment gives Biogen an opening to top expectations, which could do wonders for its beaten-down stock. While not guaranteeing approval, S.G. Cowen's Schmidt said Amevive has clearly shown promise in patient testing.
"This drug is certainly efficacious and certainly looks to have a reasonable safety profile," Schmidt said.
The analyst also noted that some of the treatments already used for psoriasis can cause dire side effects, which means Amevive could actually offer a safety improvement over available therapies. Among the drugs now used to treat severe psoriasis is cyclosporine, a powerful immune suppressive that has been known to cause kidney failure.
A strong endorsement of Amevive would also have positive implications for the whole sector, signaling that regulators are getting more receptive to biotech products, analysts said.
Biotechnology stocks have suffered a bruising decline this year because of a string of disappointments with high-profile experimental medications, starting with ImClone System's heavily hyped cancer treatment Erbitux. Many analysts and biotech executives have complained that the FDA has grown timid about approving new drugs.
Analysts say they are eager to see a biotech product break the regulatory logjam, but some doubt that Amevive will be the one to do it.
"Just from the standpoint of the biotech industry, it sure would be nice to get some good news, but we may not get it on the 23rd," Lehman's Dougherty said |
