Although Biogen Inc. declined to detail what it called "promisingresults" in its Phase III trial of interferon beta for multiple sclerosis,Wall Street reacted with enough enthusiasm to push the Cambridge,Mass.-based company's stock up 50 percent Wednesday.The excitement, according to market analysts, is based on Biogen'sannouncement that its recombinant interferon beta drug has shown"statistically significant" effects in achieving the trial's primary goal ofslowing the disease's progression.The company also said the drug demonstrated a significant effect inreducing the number of patients' exacerbations, or flare-ups, whichwas a secondary endpoint. The Phase III trial involved 301 patientswith active relapsing multiple sclerosis. Biogen said the full scientificdata will be presented Oct. 10 at an American Neurological Associationmeeting in San Francisco.Biogen's stock (NASDAQ:BGEN) closed Wednesday at $44.75 ashare, up $15.25. "It's the biggest single-day gain in a biotechnologystock in a couple of years," said Jay Silverman, of Wertheim Schroderin New York.David Stone, of Cowen & Co. in Boston, said the results are surprisingbecause many analysts were skeptical Biogen could achieve the "top ofthe mountain" goal of "getting to the underlying mechanism of thedisease."Multiple sclerosis is a progressive neurodegenerative disorder strikingabout 300,000 Americans.Chiron Corp., of Emeryville, Calif., and Germany-based Schering AGlast year got FDA approval to market Betaseron, another form ofinterferon beta, for multiple sclerosis. Their clinical trials showed thedrug reduced relapses, but fell short of demonstrating that itsignificantly affected progression of the disease.News of Biogen's trial results and the drug's potential competitionwith Betaseron sent Chiron's stock (NASDAQ:CHIR) Wednesdaydown $5.12 a share to close at $52.62.Biogen's announcement concerning the Phase III study softened theblow of its second-quarter earnings, which fell almost 90 percent froma year ago. It reported net income of $611,000, or 2 cents a share,compared with more than $5.6 million or 17 cents a share in the secondquarter of 1993.The company blamed the earnings drop on increased research anddevelopment costs and slow sales of Intron A alpha interferon forhepatitis.Biogen attributed the sales decline, in part, to a Japanese-mandatedprice decrease of about 17 percent for all alpha interferons sold in thatcountry. The company reported a second quarter increase in researchand development spending to $26.3 million from $17.1 million, a 54percent jump.Biogen May Break EvenBased on the multiple sclerosis trial results, Biogen Chairman JimVincent said he expected earnings for the second half of 1994 to rangefrom "break even to a loss" as the company moves "aggressivelytoward commercialization" of its interferon beta drug.Analysts said the decreased earnings are not surprising. "Biogen hasbeen in an awkward transition," Stone said, "from generating earningsin a royalty stream to becoming a drug company with sales of a productit developed. The royalties have not been keeping pace with expenses.But none of that matters because the royalties will be enough to allowthem to launch the (interferon beta) product without raising moremoney. What we're focusing on now are 1996 earnings."Biogen's stock had slipped from a high of $53 a share in Januarybased, in part, on concerns about the ambitious expectations of itsPhase III trial of interferon beta.Peter Drake, of Vector Securities International in Deerfield, Ill., saidpart of the surge in Wednesday's stock price was due to coverage ofshort sales.Biogen did not expect to have results of the trial until 1995. Because ofa high patient retention rate, it was able to complete dosing inFebruary. The National Institutes of Health sponsored the double-blind,placebo-controlled trial at five sites in the U.S. n

-- Charles Craig

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