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Biotech / Medical : Biogen -- Ignore unavailable to you. Want to Upgrade?

To: JEB who wrote (991)	5/29/1999 10:35:00 AM
From: William Partmann	Read Replies (1) \| Respond to of 1686

BGEN: Positive Amevive Results; Raising Ests and Price Target Salomon Smith Barney Wednesday, May 26, 1999 -------------------------------------------------------------------------------- --SUMMARY:--Biogen--Biotechnology Yesterday, BGEN announced statistically significant phase IIb results for Amevive in moderate-to-severe plaque psoriasis patients. A total of 229 pts were randomized to weekly bolus injections of Amevive (3 diff. doses) or placebo for 12 weeks, with 12-week follow-up. There were no adverse effects; T-cell counts were lowered but remained w/in normal limits. Results will be presented at a dermatology mtg in London in Dec. and at the American Academy of Dermatology in March 2000. We expect phase III trials to begin by year-end with launch in 2H 2001. Our Amevive sales estimate for 2001 is $50 million. Based on this, we are raising our 2001 EPS est. to $4.05 from $3.75. We are raising our one-year price target to $150, or 37x our '01 est. --EARNINGS PER SHARE-------------------------------------------------------- FYE 1 Qtr 2 Qtr 3 Qtr 4 Qtr Year Actual 12/98 EPS $0.36A $0.41A $0.49A $0.54A $1.80A Previous 12/99 EPS $0.58A $0.64E $0.69E $0.74E $2.65E Current 12/99 EPS $0.58A $0.64E $0.69E $0.74E $2.65E Previous 12/00 EPS $N/A $N/A $N/A $N/A $3.25E Current 12/00 EPS $N/A $N/A $N/A $N/A $3.25E Previous 12/01 EPS $N/A $N/A $N/A $N/A $3.75E Current 12/01 EPS $N/A $N/A $N/A $N/A $4.05E Footnotes: --FUNDAMENTALS-------------------------------------------------------------- Current Rank........:1S Prior:No Change Price (5/25/99).....:$107.06 P/E Ratio 12/99.....:40.4x Target Price..:$150.00 Prior:130.00 P/E Ratio 12/00.....:32.9x Proj.5yr EPS Grth...:25.0% Return on Eqty 98...:22.1% Book Value/Shr(99)..:9.25 LT Debt-to-Capital(a)9.0% Dividend............:$N/A Revenue (99)........:752.0mil Yield...............:N/A% Shares Outstanding..:74.9mil Convertible.........:No Mkt. Capitalization.:8018.8mil Hedge Clause(s).....: Comments............:(a) Data as of the most recently reported quarter. Comments............: --OPINION------------------------------------------------------------------- Biogen announced positive results from its Phase IIb trial of Amevive for moderate to severe psoriasis. The trial was a randomized placebo controlled study with 229 patients in four arms, 3 dose arms of Amevive and one placebo arm. Patients received IV bolus injections once weekly for 12 weeks, with 12 weeks of follow-up. Results: The primary end-point was efficacy at 2 weeks after completion of the 12 week dosing. The drug worked quickly, with initial effect noted 2-4 weeks after initiation of therapy. At 2 weeks post-treatment, over 50% of patients in the top 2 dose groups had improvements vs 20% in the placebo group. The physician global assessment of the disease improved to mild or better in 37% of Amevive-treated patients vs 11% of placebo patients. At 2-weeks post-treatment, 20% of Amevive patients had complete clearance vs 0% of placebo patients. At 3 months post-treatment, 23% of Amevive-treated patients were still clear or almost clear, vs 0% of placebo patients. The results were statistically significant. Safety: There was a modest reduction of T cell count, which did not go below the lower limit of normal for most patients and was reversible upon discontinuation of treatment. No capillary leak or cytokine release syndrome was detected. The results will be presented at a dermatology conference in London in December and at the American Academy of Dermatology meeting in March 2000. Biogen hopes to begin a Phase III trial before year-end - the company believes that the optimal dose is bracketed within the doses tested, but that the regimen can be optimized. We believe that the optimization schedule could involve a higher induction dose, followed by maintenance doses within the bracket. Our belief is based on the fact that the half-life of Amevive is 10 days, hence administration of once weekly doses would lead to cumulatively higher plasma concentrations. This accounts for the fact that patients continued to improve even after completion of treatment. According to our calculations, patient reached steady-state plasma concentrations of the drug around weeks 8-9. Thus, a higher initial (loading) dose of 3x the weekly dose would result in a steady state plasma concentration throughout the treatment period. In light of the fact that no dose-limiting toxicity was observed, we would expect the Phase III trial to include a loading dose of the drug. With Amevive Phase III trial starting around year-end '99, (about 1000 pts), we expect Biogen to file for FDA approval in 2H00 and gain approval around mid-year 2001. Our Amevive sales estimate for 2001 is $50 million. We are raising our EPS estimate for 2001 from $3.75 to $4.05 thanks to the additional contribution from Amevive. Previously, we did not include Amevive in our numbers. We are raising our one-year price target from $130 to $150. Biogen believes that since the number of dermatologists in the U.S. is similar to the number of neurologists, a sales force similar in size to the Avonex sales force (65 people) would be sufficient to market Amevive. The total patient population with psoriasis is about 2.5 million in the U.S. and Europe, with about 25-35% of these in the moderate to severe category. Worldwide, there are about a million patients with moderate to severe psoriasis. Current therapies for psoriasis, including methotrexate and steroids, are associated with significant toxicities, whereas Amevive, a modulator of activated T cells, appears to have a favorable profile. ----------------------------------------------------------------------------