Biogen Stock Comes to Life on Avonex Support

Shares of the company jumped nearly 10% Tuesday.
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Shares of

Biogen

surged Tuesday after independent monitors in a study said

Avonex

, a beta interferon drug from Biogen, helped multiple sclerosis patients at the earliest signs of the nervous disorder.

"The independent monitor committee stopped the study when it became unethical to continue giving the placebo," said Lisa Easley, a spokeswoman for Biogen, adding that the results for the drug were "overwhelmingly positive."

After the news was released Tuesday afternoon, Biogen's stock jumped 8 1/4, or 9.4%, to close at 94 3/8.

"I think it's the second most significant trial for the company -- the first is the original launch of Avonex," said Richard van den Broek, an analyst at

Chase Hambrecht & Quist

who rates the stock a market performer. "It's a very strong endorsement." His firm has done no underwriting for Biogen.

Currently, the drug is used to treat multiple sclerosis patients in later stages of the disorder. Biogen will file an application with the

Food and Drug Administration

for a wider prescription label after a study showed that the group taking the placebo was placed at a significant disadvantage. Beta-interferon drugs like Avonex were reserved for the latter stages of the disease partly because of the harsh flu-like side effects.

"You get diagnosed with MS and you're young, you don't want to rush out and get treated for a chronic disease," van den Broek said. "People put it off until later. These data are telling you to go on this drug right away."

Multiple sclerosis occurs when the when nerve impulses from the body to the brain are hindered by a deterioration of the myelin sheath, a fatty tissue that covers nerves and conducts nerve traffic. The disorder affects 300,000 to 500,000 people in the U.S. alone.

"This is a clear demonstration that a therapeutic intervention can be effective in delaying the onset of clinically definite MS in high-risk individuals and confirms the benefit of early treatment in MS," Jim Vincent, Biogen's chairman and chief executive, said in a statement. "Everything we continue to learn about Avonex supports the 'treat early' guidelines issued by the

U.S. National Multiple Sclerosis Society

and other MS societies worldwide and confirms use along a broad spectrum of this progressively disabling disease."

Patients who take Avonex at the point of detection of the disease could impede the accumulation of the disability and reduce the frequency of exacerbation, according to the company.

The expansion of prescriptions could help Biogen put more distance on its competitors in treating multiple sclerosis. Biogen, based in Cambridge, Mass., currently has about 60% of the market share, with $621 million in 1999 sales, and could increase that by 5% or 10%, according to van den Broek.

Shering-Plough's

(SGP)

Betaferon

is the closest competitor to Avonex.

Doctors have the prerogative to prescribe the drug as they see fit, but the application might take until the end of the year to be approved by the FDA.