Biogen Idec ( BIIB - Get Report) shares slid Friday on concerns that a competitor's oral pill for multiple sclerosis may pinch the company's profits. Merck KGaA, the German drug maker, said it would seek regulatory approval mid-year for a new oral pill for multiple sclerosis following positive phase III results released Friday. All current treatments for multiple sclerosis (MS), including Biogen Idec's Avonex and Tysabri, are given by injections, which leaves them commercially vulnerable to an oral MS drug, if one can be approved that is equally or more effective with an acceptable safety profile. In addition to Merck KGaA, Novartis ( NVS - Get Report) is also developing a pill for MS, with positive phase III data released in December. Biogen Idec, too, has its own pill for MS in phase III trials. Merck Serono, a divison of Merck KGaA, said Friday that a low-dose of its drug, cladribine, reduced the annual relapse rate in MS patients by 58% compared to placebo. A higher dose of cladribine reduced the MS relapse rate by 55% compared to a placebo. These reductions in relapse rates are generally superior to those seen by most of the injectable MS drugs currently on the market with the exception of Tysabri, although cladribine has not been tested head-to-head against any of these drugs. More data needs to be released on cladribine, especially in regard to its safety profile, before determining just how significant a player it might be in the MS market. However, just the threat of another competing MS drug, especially one with the convenience of oral dosing, was enough to send Biogen Idec shares lower.
Investors may also be selling Biogen Idec on Friday after reports suggested that Pfizer ( PFE - Get Report) was in talks to acquire Wyeth ( WYE), a move that would suggest Pfizer is not interested in acquiring a big biotech firm like Biogen Idec. Biogen Idec shares were down 6% to $47.85 in recent trading. Biogen Idec's Avonex is the market leader with 2007 sales of $1.9 billion, followed closely by Teva's ( TEVA - Get Report) Copaxone, Merck Serono's Rebif and Betaseron from Bayer. The most recently approved MS drug was Tysabri, marketed by Biogen Idec and Elan ( ELN).