West Coast Editor
The regulatory battle between two biotechnology heavyweights over multiple sclerosis treatments has ended, but the marketing war has just begun, with Serono SA gaining FDA approval of Rebif (interferon beta 1-a), which allows the firm to make an end run around competitor Biogen Inc.’s orphan drug status for Avonex (another form of interferon beta 1-a).
Serono’s stock (NYSE:SRA) closed Friday at $22.21, up $2.62, or 13.4 percent. Biogen’s shares (NASDAQ:BGEN) dropped 8.4 percent, closing down $4.75 at $51.65.
Through the orphan status, Cambridge, Mass.-based Biogen had enjoyed market exclusivity until May of next year. Tom Lang, president of Rockland, Mass.-based Serono Inc. (the U.S. arm of Serono SA), noted the FDA has never granted claims of one product’s superior efficacy over another, like it did in this case, which is what allowed Rebif to get on the market despite the orphan drug status granted Avonex.
“The fact that this is the first time makes it even more significant,” he said, in terms of reaching the market in the U.S. and continuing to compete against Avonex overseas.
“I don’t know what Biogen says, but Rebif is clearly the market leader in the rest of the world,” Lang told BioWorld Today. “We have 38 percent of the market share outside the U.S., and we have a target of 25 percent [in the U.S.] over the next three to four years. Avonex currently has about 50 percent [in the U.S.].”
The 25 percent estimate, he said, is “based on our experience. We came in a little behind in Europe, and we obviously made up a lot of ground.” In Europe, both products have been available for more than four years.
What Biogen says is that it plans to hang onto its lead in the U.S., and James Mullen, Biogen’s president and CEO, responded to the Rebif approval with a press release of Biogen’s own. Mullen called the Serono drug “just another interferon” and alleged an “inferior safety” profile, with injections required three times per week, as opposed to once a week for Avonex.
“Obviously, I’m very disappointed,” Mullen told analysts in a conference call, adding that the FDA had taken a “narrow view” of MS treatments in approving Rebif. Biogen had devised a sales and marketing strategy (including beefing the sales force from 60 to 85), and “today, we’re taking steps to implement that plan.”
Citing what he called a “very fluid competitive situation,” Mullen said Biogen was “reluctant to tip our hand,” and would not disclose all details of its strategy against Serono’s drug.
“Certainly, Rebif will get some market share, but I can tell you they’re going to fight very hard for every market share point they get,” he said.
Between 15,000 and 20,000 new patients are expected to enter the market each year over the next few years, Mullen noted, and Biogen likely will continue to get percentages “in the 30s” in Europe and “in the 50s” in the U.S.
“You can model in that range, and our retention rate is very high,” he said, noting that more than 95 percent of Avonex patients reported they were satisfied. “You will see what appears to be a huge uptake of patients on Rebif,” he added, as patients who had been in trials are converted to paying patients.
“It’s going to take a little bit of time for the noise to come out of the system,” Mullen said.
Serono, of Geneva, Switzerland, got the FDA nod for Rebif against relapsing forms of MS based on positive data from a 24-week study, known as the EVIDENCE trial, which Biogen had disputed, saying it was too short to prove much. (See BioWorld Today, Oct. 9, 2001.)
“You have to put it in context,” Lang said. “We had already conducted a trial called PRISMS, and over two years we had decreases in exacerbation counts as well as disability.”
Such was not the purpose of the EVIDENCE trial, “which was to reduce relapses and brain lesions within the first six months a pretty high bar for us to have to meet,” he said.
The brevity of the period during which data were gleaned wasn’t all that was disputed by Biogen, which even tried through the court system to block Serono from making claims based on the EVIDENCE trial. Biogen also claimed Avonex was better because of its intramuscular delivery route, as compared to Rebif’s subcutaneous administration.
Burt Adelman, vice president of medical research for Biogen, said “it’s very important for you to understand that, within the [Rebif] package insert, there are no claims of superiority [in terms of] impact on progression of disability over an extended period of time.”
Gordon Cohen, analyst with Banc of America Securities in New York, told BioWorld Today he was “surprised to see [the FDA approval], especially based on 24-week data.” He noted a portion of the Rebif label that said patients were “more likely to remain relapse-free during the 24-week period than with Avonex,” but the trial didn’t support any “cumulative effects” beyond that.
In terms of sales from this point onward, Serono’s Lang said the time is “a little too early for us to be able to [forecast] that,” but said he was “sure it will be significant.”
Franklin Berger, co-head of biotechnology research for JP Morgan H&Q in New York, estimated Rebif sales would reach $37.5 million in 2002, up from his previous estimate of $17.4 million that was based on an expected mid-year approval.
Cohen, in a research note, projected Avonex sales of $1.04 billion in 2002 and $1.1 billion in 2003.
Noted Biogen’s Mullen: “We’re talking as if there’s only two people in the fight, and there are four companies making marketing and sales actions.”
The other two MS drugs are Betaseron (interferon beta-1b) from Emeryville, Calif.-based Chiron Corp., partnered with Schering AG, of Berlin, and Copaxone (glatiramer acetate for injection), developed by Jerusalem-based Teva Pharmaceuticals Industries Ltd.
In 1996, Schering’s subsidiary, Berlex Laboratories Inc., tried to block Avonex from the market on orphan drug grounds, but failed. Lang recalled that Biogen’s argument “was based on safety against Betaseron. [Avonex] didn’t have the necrosis, but that was the only thing they could claim.”