Chiron Corp. received expected approval to manufacture themultiple sclerosis drug Betaseron on Friday.
Nonetheless, the company's stock (NASDAQ:CHIR) dippedslightly on Friday, closing at $65 a share, off $1.75, in heavytrading. Nearly 2 million shares changed hands Friday, andanother 1.8 million shares were traded Thursday, when thestock gained $2.75, closing at $66.75 a share. In comparison,only 253,000 shares were traded on Tuesday.
"Someone had knowledge it was going to happen," said analystJeff Casdin of Oppenheimer & Co., "so it was not a surprise itwent down some. It was heavily discounted."
Chiron of Emeryville, Calif., will receive 30 percent of net salesof the drug its marketing partner, Berlex Laboratories Inc., istouting as the first approved treatment for multiple sclerosis.Multiple sclerosis (MS), a progressive neurodegenerativedisease that strikes about 300,000 Americans, had beentreated with steroids and other products to alleviate symptoms.
Betaseron, a recombinant form of beta-interferon, was shownin a two-year clinical trial of 372 patients to reduce frequencyand severity of acute attacks in patients with moderate disease.About half of patients have relapsing-remitting MS, in whichsymptoms unpredictably flare up and then partially orcompletely subside.
The condition is caused by damage to the myelin sheath thatinsulates nerve fibers that transmit electrical impulses. MSmost often strikes between the ages of 20 and 40, perhapsbecause the patient's immune system has abberantly attackedthe nerve fiber insulation. Symptoms may include visionproblems, numbness or tingling, muscle weakness, slurredspeech and poor coordination.
Since brain biopsies of deceased MS patients showed manyimmune-system lymphocytes in the tissue, and interferon wasknown to regulate the response of the immune system,researchers began initial testing of interferons (beta, gammaand alpha) some 15 years ago, said Jeffrey Latts, vice presidentof clinical research and development at Berlex.
After recombinant interferon became available, it was possibleto test the naturally occurring compound in a large-scaleclinical study. Patients self-administer the drug by injecting itunder the skin every other day. The clinical trial subjects havebeen monitored for three years, which is not long enough todetermine whether the compound slows the course of thedisease. In fact, the exact mechanism of action is unclear.
However, MRI scans in a subset of 52 patients showed treatedpatients had fewer brain lesions. Berlex plans to enroll patientswhose disease has advanced to a chronic stage in a Phase IIIclinical trial this fall to explore whether brain lesions correlatewith residual disability between attacks, known as"exacerbations."
The FDA approval on Friday was for Betaseron's use in patientswith relapsing-remitting MS. Now that the approved indicationhas been specified, Chiron will prepare labels and packageinserts, and prepare to ship the drug to Berlex in nearbyRichmond, Calif., for distribution.
Chiron has been stockpiling beta-interferon, but must expandmanufacturing capacity at the nearby former Cetus Corp.facility, which it acquired, along with the Berlex Betaseronalliance, when the companies merged in 1991.
Analysts expect Chiron can initially supply about 20 percent ofMS patients before capacity is expanded in the next two years.Casdin, for instance, said he believes 30,000 patients can beserved, while he anticipates three times that demand.
While Chiron will not receive manufacturing royalties per se,spokesman Larry Kurtz said the profit-sharing structure shouldencourage the company to keep down production costs, whichanalysts estimate may be about 15 percent of revenues.
Berlex, the U.S. subsidiary of Schering AG, will solely determineprice of the drug upon distribution in about two months.Analyst Mara Goldstein of Alex. Brown & Sons estimated thatthe anticipated cost will be about $7,500 per year, but Latts ofBerlex said he expected that uninsured patients would not bebarred from obtaining the drug for financial reasons.
Biogen Inc. (NASDAQ:BGEN) of Cambridge, Mass., has acompletely native beta-interferon, produced in mammaliancells, which is being tested in MS patients in a Phase III trialsponsored by the National Institutes of Health. Biogen'scommunications director, Kathryn Bloom, said the trial,designed to show the impact on the progression of the disease,should last two more years.
-- Nancy Garcia Associate Editor
(c) 1997 American Health Consultants. All rights reserved.