The FDA approved Aubagio (teriflunomide) by Genzyme, a Sanofi SA company, as a new oral therapy for patients with relapsing multiple sclerosis (MS).

The drug, which has shown efficacy in reducing relapses, slowing progression of disability and reducing brain lesions, joins an increasingly competitive field, including Novartis AG's Gilenya (fingolimod), approved in 2010.

Paris-based Sanofi said it hopes that Aubagio will become the first property in a successful MS franchise that will also include its investigational product, Lemtrada (alemtuzumab). Genzyme is currently rejiggering its data presentation for its supplemental biologics license application for Lemtrada following a refuse-to-file letter from the FDA last month. (See BioWorld Today, Aug. 28, 2012.)

"We're entering this with the goal of being leaders in multiple sclerosis," Bill Sibold, head of MS for Genzyme, told BioWorld Today.

Genzyme's target market for Aubagio is the 80 percent of patients who are receiving "platform therapies," such as Betaseron (interferon beta-1b, Bayer AG), Avonex (interferon beta 1a, Biogen Idec Inc.), Rebif, (interferon beta 1a, Merck KGaA), Copaxone (glatiramer acetate, Teva Pharmaceutical Industries Ltd.) and Novantrone (mitoxantrone, Amgen Inc.).

Those agents are given on a long-term basis and supplemented with corticosteroids or immune suppressants during flare-ups.

Aubagio's main advantage compared to those platform therapies is that it is an oral medication, whereas all of the above medications are given as injections.

Aubagio is designed as an immunomodulator and anti-inflammatory agent. Its exact mechanism is not fully understood, but it has been found to reduce the number of activated lymphocytes in the central nervous system.

Genzyme's Phase III TEMSO trial supported its application for Aubagio. At a dose of 14 mg, the drug significantly reduced the annualized relapse rate and time to disability progression at two years compared to placebo in patients with relapsing MS. At 7 mg, Aubagio reduced the relapse rate.

The FDA's approval came with a black-box warning for teratogenicity, based on animal data, and hepatotoxicity.

According to Mike Panzara, therapeutic area head for MS and immune diseases for Genzyme, the drug is very well characterized and well tolerated, with 2. 1 million patient years of exposure globally since the launch of leflunomide, which is indicated in the U.S. for the treatment of rheumatoid arthritis. Teriflunomide is the principal active metabolite of leflunomide.

"We have that information that informs the potential profile of Aubagio, and that puts it in a different place than some of the newer therapies where that profile is unknown," Panzara said.

He added that patients are already accustomed to liver screening tests with the use of interferon. As well, many of the competing drugs are also contraindicated in pregnancy, according to Panzara, so that precaution is also "not unusual."

However, Leerink Swann analyst Seamus Fernandez did see the boxed warnings as an obstacle. He wrote in a research note that MS key opinion leaders "have consistently questioned Aubagio's appeal within the MS community's large population of women of childbearing age. As such, we only forecast global Aubagio sales of €215 million [US$279 million] in 2020."

Fernandez added that he considered that a very conservative forecast "given Sanofi's global reach and Genzyme's highly personalized patient service model."

"While Aubagio is disadvantaged by hair loss and teratogenicity risk (both key limitations for new MS patients), it is extremely well tolerated with predictable safety risks (vs. Gilenya or Tysabri) and once-daily delivery." Fernandez wrote.

Tysabri (natalizumab) is marketed by Biogen Idec Inc.

In its launch and pricing plan, Genzyme is keenly conscious of competition from Novartis' Gilenya. It has tagged Aubagio at $45,000 per year, 28 percent lower than Gilenya, as well as 6.4 percent lower than Copaxone and 8 percent lower than Avonex.

That competitive pricing reflects potentially tough competition from Gilenya. In a statement issued in response to the approval of Aubagio, Novartis noted that it pioneered oral MS therapy with the introduction of Gilenya, and that the drug is approved as first-line therapy.

Without mentioning Aubagio's boxed warning, Novartis wrote, "Gilenya has a demonstrated safety profile established in both clinical trials and real-world use in approximately 41 ,000 patients worldwide."

Next Up: BG-12

The Aubagio story has a number of positive implications for Biogen Idec. The lack of a panel for Aubagio suggested that the FDA may also not seat a panel for Biogen's investigational MS therapy, BG-12.

According to RBC Capital Markets analyst Michael J. Yee, of the two drugs, Aubagio was the one with greater risk, leading to the assumption that the FDA will also not require a panel for BG-12. "That said, we do not view Aubagio as a meaningful competitor at all vs. BG-12, primarily due to weaker efficacy and safety concerns including its boxed warnings for liver toxicity and pregnancy contraindication," Yee wrote.

Yee also observed that Aubagio is likely to become a niche therapy, relegated to a narrow market due to "relatively modest efficacy on relapse rate," as well as its boxed warning on liver toxicity and teratogenicity.

He noted that 50 percent to 70 percent of MS patients are women, and more than 30 percent of all patients are of childbearing age.

Wells Fargo analyst Brian Abrahams, too, is expecting BG-12 to have the advantage in competition with Aubagio.

"While Aubagio will have a roughly four-month lead in the U.S. market ahead of BG-12, due to its pregnancy rating we do not see it taking significant share from Avonex (despite its oral administration), and between the rating and its less impressive efficacy, we do not view it as being a major competitive threat to BG-12," Abrahams wrote.

BG-12's PDUFA date is expected in late December.