6
BioTech Stock Report, March 2003
Biogen Inc.
success, Raptiva could be launched in
the U.S. in 2004.
With Amevive, it may take longer
to achieve a response, but once pa-
tients are clear or near clearance of
their disease, they may remain in remis-
sion for a longer period of time in com-
parison to Raptiva.
However, Amgen recently re-
ported positive Phase III data for En-
brel in treating psoriasis and plans to
file for approval for this indication
upon completion of a second Phase III
trial. The results of the first Enbrel
Phase III trial were better than previ-
ous Phase II trials and underscore the
importance of tumor necrosis factors
(TNF) inhibitors in treating psoriasis.
We continue to believe that Enbrel will
likely be the most potent and near-term
Overview
Biogen is a leading biotech com-
pany known for its key therapy,
Avonex for treating multiple sclerosis
(MS).
Valuation
Investors are wondering who will
be the leader in treating moderate to
severe psoriasis patients. We expect
Biogen to enjoy a first on the market
advantage in the U.S. since Amevive
received FDA approval on January 31,
2003. Biogen has a lead time of at least
one year over Genentech, which has
filed a biological license application
(BLA) with the FDA for its psoriasis
drug, Raptiva. Assuming regulatory
competition for Amevive in the psoria-
sis market, but we do not believe that
the Enbrel data signals a weak product
launch for Amevive or undermines its
long-term success. The data confirm
the potential for Enbrel's superiority
product compared to Biogen's
Amevive and Genentech/Xoma's Rap-
tiva, as a greater number of patients
appear to respond to initial treatment
with Enbrel. We await further data on
the duration of response and retreat-
ment.
The challenge for Biogen is to
differentiate Amevive from Enbrel and
Raptiva by focusing its marketing mes-
sage on Amevive's durable effect ver-
sus the others' dosing schedules.
While this quality will likely be attrac-
tive to some, we continue to believe
that Amevive will encounter uptake
challenges given the added hassle and
safety implications of CD4 count test-
ing (once weekly for T-cell depletion, a
sign the immune system has been low-
ered). Also, given the average derma-
tologist's unfamiliarity with new bio-
logic therapies to treat psoriasis and
logistical issues relating to administer-
ing the drug, market penetration could
be more gradual.
Nonetheless, the goal of current
psoriasis treatments is to clear patients
of their lesions for a prolonged period
of time. Amevive fits this treatment
paradigm. Enbrel and Raptiva must be
given continuously to maintain a treat-
ment effect. For some patients and
physicians prolonged remission may
be a treatment goal, and for these pa-
tients, Amevive may be very well
suited.
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