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Home > Archive > Psoriasis support > April 2005 > The Psoriasis Wars Continue, bg-12
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The Psoriasis Wars Continue, bg-12
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| The Psoriasis Wars Continue
http://www.fool.com/News/mft/2005/mft05040826.htm
By David Nierengarten
April 8, 2005
Look out, Amgen (Nasdaq: AMGN), Johnson & Johnson (NYSE: JNJ), and
Abbott Laboratories (NYSE: ABT). Biogen-Idec (Nasdaq: BIIB) is trying
to outflank your market-dominating psoriasis drugs with a new one of
its own. With the continuing lagging performance of Biogen's current
treatment, Amevive, the company has teamed up with private Swiss
pharmaceutical company Fumapharm to revive its chances in the psoriasis
wars.
Currently, the multibillion-dollar moderate-to-severe psoriasis market
is chiefly divided among Amgen's Enbrel, J&J's Remicade, and Abbott's
Humira -- all protein-based drugs that must be injected. There is some
big money to be made in this market, with a year's worth of treatments
costing upwards of $10,000, and since there's no cure for psoriasis,
this is a long-lasting revenue stream.
Naturally, insurance companies, who are usually paying for these
medicines, would love to shell out less for an equivalent
small-molecule (read: pill) treatment. And of course any patient who
has to pay out-of-pocket would jump at a less-costly treatment.
Enter Biogen-Idec and Fumapharm. They have taken their
psoriasis-treating pill, BG-12, through a phase 3 trial in Germany and
significantly reduced psoriasis symptoms in patients. According to the
companies, the median reduction in psoriasis severity was 68% in
patients taking their pills versus only 10% in placebo.
While the company is still sifting through the data to determine the
number of patients who have reached the gold standard reduction in
symptoms of 75% (the PASI 75 score), given a median reduction of 68%,
it's safe to say that probably around 40% achieved that treatment
level. This percentage would correspond to the results in the phase 2
trial of this compound.
Those results and a low incidence of side effects would put BG-12 on
par with Raptiva, a biological therapeutic sold by Genentech (NYSE:
DNA) and Xoma (Nasdaq: XOMA), but less effective than Enbrel or
Remicade, which can achieve PASI 75 scores closer to 80%. But assuming
significant cost and delivery (pill versus injection) advantages to
BG-12, I would expect many patients might try it out first, and if it
doesn't work for them, then move to a biological therapy.
Despite all the bad news surrounding Biogen, investors should consider
taking a second look at the company's prospects. Trading at 30 times
EV/EBITDA, it's certainly not cheap, but it's a better value than it
has been in a long time. With a psoriasis-fighting pill potentially
coming online in Europe and eventually in the U.S., along with an
expanded indication for Rituxan in rheumatoid arthritis, there are
silver linings to the Tysabri cloud that settled over sunny, San
Diego-based Biogen.
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