Doubts Over New Drug Weigh on Biogen Shares - TheStreet

Doubts Over New Drug Weigh on Biogen Shares

Shares of the biotech company dropped after it announced it was halting Phase II trials of its Antova drug.
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Biogen

(BGEN)

stock plummeted Thursday in after-hours trading after the biotech announced it was halting several early stage clinical trials for a drug that treats hemophilia and multiple sclerosis.

The Cambridge, Mass.-based company's stock fell more than 10 points after the closing bell. Biogen's stock finished the traditional trading session off 1 7/16 at 72 9/16. The announcement was made after the normal close.

Biogen desperately needs a follow-up for its hit multiple sclerosis drug

Avonex

. So the setback to

Antova

, which appears to have problems with blood-clotting, is a blow. Many analysts and investors feel the more important product in the biotech's pipeline, however, is

Amevive

, a drug for the skin rash disease psoriasis.

"Biogen has long been considered a one-trick pony," says Carl Gordon, an analyst for

OrbiMed Advisors

. "Over the past two years, they've tried to convince investors that they have other drug possibilities. Biogen management had suggested that Antova, though behind Amevive, was a possible home run."

But Gordon notes that it was a positive sign that Biogen wasn't stopping all of the trials, as patients in the kidney transplantation program still will receive treatment. (Gordon's firm rates Biogen long-term accumulate, though he says that would be reassessed Friday if the stock continues to tumble. His firm hasn't participated in recent underwriting for Biogen.)

For its part, Biogen says it is working closely with the

Federal Drug Administration

on reviewing clinical data to determine whether trials could be resumed.

"While these data are not clear yet, we are being very proactive because we are dealing with patients in these clinical trials who are at a substantially elevated risk for thrombo-embolic events," Jim Vincent, Biogen's chief executive, said in a statement. "It is very complicated to determine whether the events that have been seen are connected to our drug or not. In the interests of patient safety, we have asked the investigators participating in the affected Phase II trials to stop dosing patients at this time.''