If a startlingly positive study on Rituxan's effect on a rare skin disorder is backed by additional data, the already big-selling drug could be poised to win over a brand new market.

That of course would be good news for




Biogen Idec

(BIIB) - Get Report

the co-marketers of Rituxan.

The drug is currently approved for non-Hodgkin's lymphoma and rheumatoid arthritis, but last week an intriguing article was published in the

New England Journal of Medicine

discussing Rituxan's impact on a condition called pemphigus vulgaris.

Only 11 patients were involved, but nine of them had "rapid resolution of lesions and a clinical remission," according to the article. Also impressive was that the nine didn't need to take any additional medication. No observable side effects were found.

Pemphigus vulgaris is a rare autoimmune blistering disorder affecting roughly 5,000 people in the U.S. and 40,000 worldwide. The painful blisters can make it difficult or even impossible for patients to conduct their normal routines, and the disease ultimately can be fatal.

The study, led by Dr. A. Razzaque Ahmed of New England Baptist Hospital, was conducted independently and wasn't funded by the two drugmakers.

In the trial, Rituxan was combined with intravenous immunoglobulin. Prior to enrolling, the patients in the study had pemphigus for an average of 6.5 years. They had failed every other type of therapy, including corticosteroids plus immunosuppressive agents and intravenous immunoglobulin.

The patients also didn't respond to CellCept, a fast-tracked immunosuppressant being tested by

Aspreva Pharmaceuticals


. CellCept is

expected to receive approval for lupus and pemphigus in 2007, but the drug recently

failed to meet the primary endpoints of phase III trials for myasthenia gravis.

The patients who received Rituxan had no other treatment options, according to Dr. Ahmed. "There was absolutely no hope. There was no drug left in the world to give them," he says.

What particularly interested Dr. Ahmed was not just that the therapy killed pemphigus, but that it appeared to reset the body's immune system so that the disease didn't reappear. Patients have been disease-free for an average of two-and-a-half years.

Nine of the 11 needed no further treatment, while the other two received additional courses of Rituxan after they experienced recurrences one year later. They have now been disease free for 24 and 15 months, respectively.

The Boston-based physician is hopeful that this course of therapy can be refined and someday used to treat other maladies. "If we can study this mechanism using pemphigus as the signature disease, then maybe we can apply the principle to other debilitating diseases," he ruminates. "It could be a huge breakthrough in the study of autoimmune diseases."

Dr. Ahmed claims the treatment has allowed several extremely sick patients to reclaim their normal lives. An ear, nose and throat doctor, a medical school director and a Harvard Business School department chair are all back to work since undergoing the experimental therapy. Additionally, a patient who had the condition on his esophagus, which caused him to need a feeding tube, was able to remove it after six weeks of treatment.

Patients are eagerly awaiting more news on Rituxan's effect on pemphigus. "If we can get off prednisone, this is a life-changing event," says Sal Capo, president of the Pemphigus and Pemphigoid Society. Prednisone is a steroid that acts as an immunosuppressant and has a wide range of nasty side effects. Capo said at some point, nearly all pemphigus patients wind up on the drug.

Genentech declined to comment specifically for this article because it wasn't involved in the study. However, a company representative did acknowledge that the company is supporting other autoimmune studies, including at least one in pemphigus, and that it will closely examine Dr. Ahmed's data.

Whether Rituxan will start being used off-label to treat pemphigus is just speculation at this point. Dr. Ahmed is continuing to research its effect in patients, but Genentech said it doesn't promote its products for any uses other than those for which they have been approved.

Even if Rituxan does begin to attract off-label usage, the patient population is so small that it's unlikely to move the needle on the drug, which recorded

sales of $509 million in the third quarter. However, should Rituxan continue to help patients with pemphigus, and researchers gain a better understanding of why, the potential -- in both dollars and the ability to relieve suffering -- could be enormous in the autoimmune space.

In keeping with TSC's editorial policy, Lichtenfeld doesn't own or short individual stocks. He also doesn't invest in hedge funds or other private investment partnerships.

Marc Lichtenfeld was previously an analyst at Avalon Research Group and The Weiss Group and a trader at Carlin Equities. He holds NASD 86, 87, 7 and 63 licenses. His prior journalism experience includes being a reporter/anchor for On24 in San Francisco and a managing editor of InvestorsObserver, a personal finance Web site. He is a graduate of the State University of New York at Albany. He appreciates your feedback;

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