West Coast Editor
Adding weight to the old superstition that bad news comes in sets of three, Biogen Idec Inc. and Elan Corp. plc reported that another case of progressive multifocal leukoencephalopathy (PML) has turned up in a patient given Tysabri.
This time, though, the fatal PML developed in a trial subject who had Crohn's disease and who was not also exposed to beta interferon - which some (albeit few) observers speculated might have been at least partially to blame in the two earlier instances in multiple sclerosis patients, one of whom died.
"This is not good at all," said Christopher Raymond, analyst with Robert W. Baird & Co. in Chicago. "Given that we've now seen this in patients who have not been exposed to Avonex, you can draw a pretty solid line to Tysabri as a culprit."
On Thursday, much of Wall Street was saying last rites for Tysabri, as well.
Cambridge, Mass.-based Biogen Idec's stock (NASDAQ:BIIB) closed Thursday at $34.51, down $3.84, or 10 percent. Elan, of Dublin, Ireland, got slammed much harder, watching its shares (NYSE:ELN) end the day at $3.24, down $3.74, or 53.6 percent.
Both companies had been crushed earlier. When Tysabri (natalizumab) was withdrawn from the market in late February, just three months after its approval, Biogen Idec plummeted 42.6 percent, or $28.63, to close at $38.65, while Elan fell 70.3 percent, or $18.90, to close at $8. (See BioWorld Today, March 1, 2005.)
The latest PML patient, who died in December 2003, first was diagnosed as having malignant astrocytoma, a finding confirmed in July of that year by histopathology. Upon checking the case again, though, Biogen Idec and Elan have concluded the cause of death was PML.
Administered eight doses of Tysabri over an 18-month period, the patient had a medication history that also included multiple courses of immunosuppressants, which might have complicated the picture. But that factor probably won't be enough to convince investors - not to mention regulators, who are more wary than ever - that Tysabri is safe as a single agent. That was a key point in getting the drug back on the market.
"I'd say it's got a 5 percent chance" of returning to the market, Raymond told BioWorld Today.
Biogen Idec is left with two blockbusters, Avonex (interferon beta-1a), which also targets MS, and Rituxan (rituximab), for B-cell non-Hodgkin's lymphoma, partnered with South San Francisco-based Genentech Inc. Now it has strongly unlikely prospects for making Tysabri its third, as once was hoped.
Avonex, on the market since 1996, was given with Tysabri in the earlier PML cases, and the latest instance is the first in which Avonex was not involved. Avonex has had its own problems lately, with the FDA warning in March that the compound could cause severe liver damage in certain cases.
Raymond called the warning "not meaningful," since the FDA has attached similar warnings to other compounds and most likely wants to "level the playing field" for competitors.
"The thing we have to watch - and I'm not sure this is happening - is whether there will be a backlash against Avonex or Biogen Idec because of this," Raymond said. "There's already acrimony between Biogen Idec and Serono" over the beta interferon for MS, Rebif, which is one of Avonex's competitors.
Shares of Geneva-based Serono SA rose on the first news of Tysabri's PML troubles, and doctors already regard Rebif as a "decent alternative" to Avonex, he said. Other MS drugs are Copaxone (glatiramer acetate), from Teva Pharmaceutical Industries Ltd., of Jerusalem, and Betaseron, sold by Montville, N.J.-based Berlex Laboratories Inc.
The other heavy hitter, Rituxan, faces difficulty already. Rituxan shows "major signs of slowing, because the reimbursement doesn't favor heavy off-label use like it used to," Raymond said.
If there's any good news on the Biogen Idec front, it's that "as Rituxan rolls over, Zevalin seems to be picking up the slack, at least in indolent refractory lymphoma," he said.
Zevalin (ibritumomab tiuxetan), approved for relapsed or refractory low-grade, follicular or transformed B-cell non-Hodgkin's lymphoma, netted revenues of $8 million in the fourth quarter of last year ($5 million for the period in 2003) and $23 million for the full year ($20 million in 2003).
But that compound doesn't figure hugely in Biogen Idec's overall picture, and "I don't know if that's enough to get somebody to buy the stock," said Raymond, who has lowered his price target to $36 from $39, and has taken Tysabri out of his model entirely.
Elan finds itself in somewhat deeper trouble than Biogen Idec, but it's struggled before. Rocked by questions in 2002 over accounting methodology in its many joint ventures, the firm reorganized and effectively reinvented itself, aiming to transform from a pharmaceutical concern to a biotechnology company. (See BioWorld Today, June 18, 2004.)
But Tysabri was regarded as a big part of that plan. Bereft of the would-be strong seller, Elan would have a pair of anti-infective compounds that are due to lose patent protection shortly and the recently approved Prialt (ziconotide) for pain, along with an Alzheimer's disease program. (See BioWorld Today, Dec. 30, 2004.)
Some directors of Elan, including Garo Armen, its former chairman, are said to be considering a split of the group's original drug-delivery business from its U.S.-based biotechnology operations, as part of a plan to buy time while figuring out how to handle the Tysabri trouble.
Meanwhile, with Elan, Biogen Idec is sifting clinical data to evaluate about 3,000 patients treated with Tysabri for multiple sclerosis, Crohn's disease and rheumatoid arthritis.
How likely is another case of PML?
"It's more possible than it was yesterday," Raymond said.
Still to be determined is the FDA fallout from the Tysabri debacle. He acknowledged "there's a perception that the FDA is cowering in the corner" as a result of the Tysabri embarrassment.
But, Raymond noted, the agency in mid-March - well after the Tysabri trouble - gave its blessing to San Diego-based Amylin Pharmaceuticals Inc.'s Symlin (pramlintide acetate) for patients with Type I or Type II diabetes, whose insulin is not giving them glucose control.
"That drug had hair on it," he said. "It's been to the FDA a couple of times."
In 2003, the FDA issued its second approvable letter, asking for more data. Two years earlier, despite rejection by the Endocrinologic and Metabolic Drugs advisory panel, the agency in October 2001 issued an approvable letter for the compound if the company would conduct another clinical trial. (See BioWorld Today, July 27, 2001; Oct. 15, 2001; and Dec. 19, 2003.)
"Symlin was approved after Tysabri was yanked," Raymond said. "That would seem to dispel the myth that the FDA is in sort of lockdown mode."