Betaseron® by Berlex Laboratories, the brand name for Interferon beta-1b, has as its active ingredient a modified human protein produced by the Escherichia coli bacteria that acts like the body's natural interferon. Treatments consist of subcutaneous (under the skin) injections every other day for relapsing forms of MS and the reduction of MRI lesions. Betaseron® does not need to be refrigerated and can be stored at room temperature, unlike the other interferon-based medications.

Biogen Idec’s Avonex® is the brand name for Interferon beta-1a. Avonex was the first treatment indicated for relapsing forms of MS to both reduce physical disability progression and decrease the frequency of clinical exacerbations. Approved by the FDA for marketing in the US on May 17, 1996, it is made up of exactly the same amino acids (major components of proteins) as the interferon beta naturally found in the human body. Treatment is a once-a-week intramuscular (IM) injection, usually in the large muscles of the thigh, upper arm, or hip. This October, Biogen said that sales of Avonex®, its flagship product, grew worldwide by 16 percent to $US 346 million for the third quarter.

Although Avonex® sales for the past several quarters has been more or less steady with a running rate about $US 349 million per quarter, the year-over-year revenue growth has been on a decline. This issue has raised some concerns on Wall Street regarding the expectation of Avonex® sales and valuation of Biogen Idec's share price.

Chemically identical to Avonex® is Rebif®, a Interferon beta-1a drug from Serono, Inc. Approved by the FDA in 2002 for relapsing forms of MS to decrease the frequency of clinical exacerbations and to delay the accumulation of physical disability, Rebif is taken by subcutaneous injection three times a week. 

Rebif® is the fastest growing MS disease modifying drug and has overtaken Betaseron® in terms of new prescriptions share since July 2004 in the USA. Also from Serono is Novantrone®, brand name for Mitoxantrone, an immune system suppressor that was FDA approved in 2000 for treatment of worsening relapsing-remitting MS and for progressive-relapsing or secondary-progressive MS. 

Novantrone® is usually administered four times a year by IV infusion in a medical facility and can be given for a limited time only to avoid possible side effects to the heart. Novantrone® reduces new lesions, decreases attacks or relapses, and slows the rate of increasing disability. Novantrone® sales in Q3 2004 were just $US 10.2 million, compared to $US 6.6 million in Q3 2003.

Teva Pharmaceutical Industries, Israel’s top drug firm, is the developer of Copaxone, brand name for glatiramer acetate formerly known as copolymer-1, a synthetic compound that is a mixture of four amino acids. Copaxone is in a different class of drug used to treat MS as it is a non-interferon medication. FDA approved in 1996 for the treatment of relapsing-remitting MS, Copaxone is a subcutaneous injection drug that is taken daily to reduce new brain lesions and the frequency of relapses by targeting the site of the lesion and reducing inflammation. We estimate that the annualized sales of Copaxone® in 2004 could exceed $US 940 million with over 30 percent year-over-year growth next year.

How competitive is Tysabri in the MS Drug Market? -Tysabri costs $1,808 for each dose or about $24,000 per year. By comparison, Avonex, Betaseron, Copaxone and Rebif cost between $11,000 and $14,000 per year. According to Biogen Idec officials, Medicare will cover Tysabri but insurance companies will need to be queried individually. 

Based upon the recent 2-year SENTINEL clinical trial data showing an annualized relapse rate of 0.78 for Avonex placebo patients compared to 0.36 for patients taking Tysabri in combination with Avonex, or over 50 percent improvement, the higher drug cost for Tysabri would be justified since the combination treatment will significantly improve the patient's quality of life as well as cut down the indirect costs associated with work time-lost and hospital stays. Common side effects associated with Tysabri include headache, fatigue, urinary tract infection, depression, lower respiratory tract infection, joint pain and abdominal discomfort.

Tysabri is also a potential treatment in patients with bowel disorder Crohn’s disease, and Rheumatoid Arthritis (RA). Results of a final Phase III study into its use against Crohn's disease will appear in the first half of 2005 while Phase II rheumatoid arthritis trial data for Tysabri should be published by the middle of next year, Elan CEO Kelly Martin said. Biogen Idec Inc. has said Tysabri can expand the current multiple sclerosis market to $US 6 billion from $US 3.6 billion over time.

What are the Opinions from Wall Street Analysts?  Prior to FDA approval, Wall Street's opinions were split and overwhelming not-so-positive despite facts that the new drug treatment will help millions of patients suffering from MS. Mr. David Armstrong, who wrote for the Wall Street Journal, believed that FDA approval of Tysabri isn't necessarily good news for Biogen shareholders and that BIIB shares may take a hit. The BIIB shares have however, gained as much as 17 percent after the Wall Street article was released on November 19.

This week, Banc of America Securities upgraded Biogen Idec to "buy" from "neutral" and raised the 12-month price target to $88 from $56. The research firm believes that Tysabri could grow annual sales from $388 million in fiscal 2005 to more than $3.2 billion by 2010. Based upon the Banc of America survey, 20% of neurologists already identify Tysabri as their first-line therapy of choice while 66% of them intend to add or switch to Tysabri after relapse from another disease-modifying agent.

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