Biogen Inc. said Thursday that it filed for marketing approval inEurope for its interferon beta product for multiple sclerosis, and plansto file shortly in the U.S.

The submission marks a major milestone for Biogen, which iscounting on revenues from the product to help boost earnings, whichhave been flat or sagging in recent quarters because of reduced salesin Japan and the failed Phase III trial of the anti-coagulant Hiruloglast fall.

The product, called Avonex, would be the first one developed byBiogen that it would market itself. Other products developed by theCambridge, Mass. company are being sold by marketing partners.

The significance of the announcement is that it indicates Biogen hasachieved equivalency of the product made in the U.S. to the one thatwas manufactured in Germany, according to Jeff Casdin, a first vicepresident for New York-based Merrill Lynch & Co. "Biogen neverwould have gone out on a limb and said it will file in the U.S. if ithadn't proved equivalence," he said. `That's the main thing."

Biogen opened an office in Paris late last year, and is establishingcountry organizations in the U.K., France and Germany, said Biogenspokesman Kenneth Keen. Last week the company announced anagreement with Dompe SpA, of Milan, for distribution rights in Italy,and may work with local companies in other countries, Keen said.

"We'll have an aggressive marketing strategy if and when the productis approved," Keen said. "We're building sales organizations inEurope and the U.S. in preparation for approval."

Keen estimated there are about 200,000 multiple sclerosis patients inthe U.S., and slightly more than that in Western Europe. He said it'spremature to talk about pricing strategies.

Keen wouldn't comment on any patent issues that might beoutstanding, except to say, "To the best of our knowledge we have allthe patents necessary to market Avonex worldwide."

In January, Schering AG said it was issued a U.S. patent covering themanufacture of beta interferon. Schering, of Germany, is the parentcompany of Berlex Laboratories Inc., which is the marketing partnerfor Chiron Corp.'s beta interferon product, Betaseron, for multiplesclerosis. Betaseron is being reviewed in Europe, where Biogen has apatent.

Meg Malloy, an analyst with Needham & Co. Inc., said she's heardnothing with respect to any litigation between the companies. What'smost likely, she said, is the companies entering a cross-licensingarrangement.

Casdin agreed, saying it's an "interesting situation where each partyhas a patent that covers the competitor's manufacture" of its product."It's a stand-off," he said. "The logical outcome is they will cross-license."

"The market is large enough for more than one player," Malloy said."There's a certain learning curve that has to go on with respect tobeta interferon products. Biogen likely will benefit from some of theearlier work that has gone on.

"Biogen's product is sufficiently different from the Chiron/Berlexproduct that they'll be able to claim potential advantages," she said.They include once-a-week dosing rather than every other day, fewerside effects, and the fact that Biogen showed reduced disability in itstrial. On the other hand, Malloy said, "I wouldn't underestimate whatit means to be first to market."

Casdin said Betaseron has an advantage in that there's been moreclinical trial data, that there are no secrets about it. Biogen has yet tohave its data published in a peer-reviewed journal, nor has it had togo before an advisory committee. But if the overall impression thatthe data so far has given is confirmed, then Biogen's product clearlywill be the winner, he said.

Chiron and Schering received approval in 1993 for Betaseron, arecombinant beta interferon produced by Escherichia coli and thusnon-glycosylated. Biogen's recombinant product is a glycoproteinproduced in mammalian cells.

Chiron's trial data proved Betaseron reduced relapses, but didn'tshow a significant effect on progression. That could be attributable tothe fact that Chiron's patient population was sicker than those inBiogen's trial. (For details of Biogen's Phase III results, seeBioWorld Today, Oct. 11-12, 1994, p. 1.)

Biogen's stock price shot up 50 percent, or $15.25, to close at $44.75on July 27, when Amgen announced its interferon beta drug achievedstatistically significant effects in slowing multiple sclerosisprogression. On Nov. 1, the stock dropped $9, to $40, after theHirulog results came out.

Biogen (NASDAQ:BGEN) was up $1.25 Thursday to close at$40.50. Chiron (NASDAQ:CHIR) was down $1.50, closing at$51.75. n

-- Jim Shrine

(c) 1997 American Health Consultants. All rights reserved.