Rituxan, the blockbuster cancer drug marketed by
, appears to be a highly effective treatment for multiple sclerosis as well.
Results from a randomized phase II study presented Tuesday in Boston show that multiple sclerosis patients given a single course of Rituxan reported a 91% reduction in the number of cumulative brain lesions compared with placebo patients after six months.
The proportion of patients suffering from a disease relapse through a six-month period also was reduced by 58% with Rituxan compared with placebo. Both results were statistically significant.
Genentech shares were at $82.07 in recent trading, up $2.08. Biogen Idec shares were at $47.71, up 50 cents.
While the data come from a small phase II study that needs to be confirmed with larger, phase III clinical work that's still years away, the study's presenter believes Rituxan might be more effective than the four drugs -- Avonex, Betaseron, Copaxone and Rebif -- now considered the standard of care in treating the disease.
(These drugs are marketed by Biogen Idec,
"To me, this
Rituxan data resembles Tysabri," says Dr. Stephen Hauser, referring to the newest -- and most effective -- multiple sclerosis drug to hit the market from Biogen Idec and
. Hauser is chair of the Neurology Department at the University of California San Francisco. He presented the Rituxan data Tuesday at the annual meeting of the American Academy of Neurology, being held in Boston.
Genentech reported Rituxan total sales of $2.25 billion in 2006, coming mainly from use as a treatment for blood-related cancers. The drug also was recently approved as a treatment for advanced rheumatoid arthritis.
The market potential for Rituxan in multiple sclerosis is quite large. To get some sense of how big, consider that Biogen Idec reported Avonex sales of $1.7 billion in 2006.
While Genentech and Biogen Idec have both profited from Rituxan's success so far, moving the drug aggressively into multiple sclerosis may prove to be a financial windfall for the former -- and a major headache for the latter.
Under the current collaborative agreement, operating profits for Rituxan are split 60% for Genentech and 40% for Biogen Idec. But if a second-generation version of Rituxan reaches the market, the profit split shifts to 70%-30% in Genentech's favor.
Genentech and Biogen Idec are currently embroiled in a legal dispute over this second-generation Rituxan, known as ocrelizumab, with the case now in front of an arbitration panel.
It's widely believed that Genentech wants to move quickly ahead with ocrelizumab's development, including in multiple sclerosis, because of Tuesday's positive Rituxan data -- and because the drug represents another potentially big boost to the company's sales and earnings growth.
Genentech has stated that it wishes to begin phase III multiple sclerosis trials before the end of this year.
Biogen Idec is likely trying to slow down ocrelizumab, because the drug means a reduced profit split and, maybe more importantly, a potentially huge competitive threat to its core Avonex franchise. Avonex sales made up 64% of Biogen Idec's total revenue in 2006.
JPMorgan biotech analyst Geoffrey Meacham says Rituxan's 58% relative relapse rate compares very favorably with Tysabri's 63% relapse rate and likely exceeds efficacy seen from older drugs such as Avonex.
Rituxan data will likely surprise the Street because it's much closer to Tysabri than people realized," he says. Meacham rates both Genentech and Biogen Idec at overweight, and both companies are investment banking clients of his firm.
Piper Jaffray analyst Caroline Stewart sees moving Rituxan into multiple sclerosis as a problem for Biogen Idec because of the long-term threat to Avonex. This factors into her market perform rating on the stock. Piper Jaffray doesn't have a banking relationship with Biogen Idec.
A Genentech spokeswoman declined to discuss the arbitration case with Biotech Idec.
Biogen Idec spokeswoman Amy Brockelman said the company is excited about the new Rituxan data in multiple sclerosis. As for Rituxan potentially cannabalizing the company's Avonex franchise, Brockelman says Rituxan/ocrelizumab is just one of four new drug programs for multiple sclerosis currently running through Biogen Idec's pipeline. One of these programs, a drug called BG12, recently began phase III trials.
"As a company, Biogen Idec is committed to developing new therapies for multiple sclerosis," said Brockelman.
In multiple sclerosis, the body's own immune system is thought to attack myelin, a fatty, protective sheath that surrounds nerve fibers in the brain and spinal cord. A breakdown in myelin, therefore, damages underlying neurons and interferes with electrical signals that the brain sends through the spinal cord to the rest of the body.
The disease is the leading cause of neurological disability in young adults. It's a chronic condition, in that the neurologic disability can wax and wane over time, gradually accumulating and manifesting itself as muscle weakness, loss of balance and coordination, loss of memory or speech and severe fatigue.
It's long been thought that the most effective way to treat multiple sclerosis was by manipulating the body's T cells, one of two major components of the immune system. So-called T-cell mediation is the primary mechanism by which drugs such as Avonex, Rebif and Tysabri work against multiple sclerosis.
From a scientific standpoint, the excitement over Tuesday's Rituxan data is that the drug opens up an entirely new way to treat the disease. Rituxan is an antibody that targets and selectively kills B cells, the other major component of a body's immune system.
The Rituxan phase II study enrolled 104 patients with relapsing-remitting multiple sclerosis, randomizing them 2-to-1 to receive a single course of Rituxan or placebo. Patients then underwent brain scans to measure the number of lesions through six months.
As stated above, Rituxan patients had a 91% reduction in the number of gadolinium-enhancing T1 lesions compared with placebo patients through week 24 of the study. This was the primary efficacy endpoint of the study, and it was highly statistically significant in favor of Rituxan.
"Rituxan had a remarkable MRI effect," said UCSF's Hauser.
A secondary endpoint of the study looked at relapse rate, a measure of clinical benefit for patients. Here, too, Rituxan performed well, with 14.5% of patients on the drug reporting a relapse during the six months of the study, compared with 34.3% of placebo patients.
JPMorgan's Meacham says he and others will compare Rituxan with currently approved multiple sclerosis drugs but that such an analysis is hampered by differences in trial design and the way endpoints were measured. (And of course, these drugs have not been tested against each other.)
For instance, patients in the Rituxan study appear to have less-advanced or less-serious disease than did patients in a similar phase II study of Biogen Idec's Tysabri. The long-term safety of Rituxan in multiple sclerosis is also an important unknown, although the drug would be popular, if approved, because it can be given as an infusion once every six months compared with current drugs that require weekly injections.
Adam Feuerstein writes regularly for RealMoney.com. In keeping with TSC's editorial policy, he doesn't own or short individual stocks, although he owns stock in TheStreet.com. He also doesn't invest in hedge funds or other private investment partnerships. Feuerstein appreciates your feedback;
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