In a move that caught just about everyone unaware, Biogen Inc.'s Amevive, recently approved for psoriasis in the U.S., was rejected in Europe when a scientific advisory body requested more information, effectively moving approval years away.
"Obviously, we are quite surprised," Biogen CEO and Chairman James Mullen said in a conference call Thursday. "Typically, in [the approval process], many questions and issues arise. In this respect, this process was typical."
"Certainly, this was unexpected," said Jennifer Chao, analyst with RBC Capital Markets. "Based on what we understood, we had expected to have the [European approval] with no complications."
The news caused Biogen's stock (NASDAQ:BGEN) to lose $3.20 Thursday, or 8.4 percent, to close at $34.96.
Biogen said the Committee for Proprietary Medicinal Products (CPMP), an advisory body to the European Medicines Evaluation Agency, asked for more data. To comply, Biogen "decided to withdraw the application and develop the additional clinical data that will be necessary for approval," Mullen said. The entire process "could take several years."
"It became clear that the [EU] member states were trending toward a negative opinion on the clinical data," Mullen said. "They either wanted a large data set in a subpopulation of high-need patients, and/or they wanted head-to-head clinical data against current therapies."
Amevive (alefacept), designed to selectively target the CD45RO+ subset of T cells, was approved in the U.S. late in January to treat adults with moderate to severe chronic plaque psoriasis who are candidates for systemic therapy or phototherapy. (See BioWorld Today, Feb. 3, 2003.)
Biogen submitted identical applications for the product on the two continents in August 2001 through what's called a common technical document, and was the first company to do so after the method was implemented by the International Conference on Harmonization. (See BioWorld Today, Aug. 7, 2001.)
The difference in European and U.S. approval, then, might have more to do with the patient populations than the applications, Chao said.
"Europeans appear to be more comfortable using standard-of-care treatments," Chao said, and added that that might be what led the advisory panel to request additional clinical information, including comparative data to standard-of-care treatments. Comparative trials are not required in regulatory filings.
Burt Adelman, executive vice president, research and development at Biogen, stressed during the conference call that "the issue of safety did not play a role in [the body's] decision."
And although the news weighed on Biogen's stock, the company pointed out that it does not affect its 2003 guidance. For 2004 and beyond, the company said it would re-evaluate and provide more guidance in its first-quarter conference call, slated for April 17.
Chao sees now as a good time to acquire Biogen stock.
"Although we expect downward pressure on shares, we would be buyers on inordinate weakness," she and Robert Carroll wrote in a research note.
"On its face, the news is not positive," Chao told BioWorld Today. "But the financial impact is fairly mitigated by the limited opportunity in Europe to date." She said that by monitoring sales of Enbrel and Rituxan - both approved biologics - in Europe, "it's clear that the European market has not embraced the biologics."
Chao and RBC have not changed their Amevive estimates for the near future. They are projecting $105 million in sales in 2003, $265 million in 2004 and $442 million in 2005. Chao acknowledged that the European market has huge potential - maybe as large as the U.S. - but said, "It's fair to say that broader Street viewed the European population as an upside to current [Amevive] projections."
Mullen, in the conference call, agreed. Mullen said most analyst notes he surveyed "assumed 20 percent to 35 percent of Amevive revenue would be ex-U.S., and I think that is a reasonable range."
Worldwide Market Could Be Big Enough For All
What this means to the European psoriasis market is not yet clear.
Chao said, "There is no question that competitors are going to be jockeying in [Europe]," but she likes Amevive - at least in one area of what could turn out to be a wide-open, fractured worldwide market.
"We view the [psoriasis] products in two ways - chronic vs. intermittent," she said, explaining that the chronic products - such as Xoma Ltd.'s Raptiva, Amgen Inc.'s Enbrel and Abbott Laboratories' Humira - require dosing once a week or once every other week. Intermittent products, such as Centocor Inc.'s Remicade and Amevive, allow for "seasonal drug holidays," she said. Although Amevive might require less-frequent dosing and translate into a better quality of life, it could suffer in other categories, she said.
"The setback with the intermittents, particularly with Amevive, is the efficacy appears to be lower than the chronic treatments," she said. "But the treatment experience with Amevive appears to be very strong, so there appears to be a market for it."
Chao said there are 7 million psoriasis patients in the U.S., 2 million of whom are moderate to severe patients, the kind Amevive is approved to treat. Of those, she said the "real addressable population" is about 150,000 to 250,000 patients who are actively seeing a physician and seeking treatments. These patients are the "low-hanging fruit," she said.
Figuring an annual price per treatment of $10,000, that sets the U.S. market at about $1.5 billion to $2.5 billion, which "is really just a starting point," she said. There could be room for all the products.
"There really is," she said. "But I do think Amgen's Enbrel will become the kingpin of chronic treatments and I believe that Amevive will be the most dominant in the intermittent market."