Biogen Idec ( BIIB) gathered investors together Wednesday to pitch the company's research pipeline and stifle concerns that its leading position in the multiple sclerosis treatment market was vulnerable to competition.

A phase III study of a long-acting version of Avonex, the company's top-selling multiple sclerosis drug, will begin in the middle of the year, the company announced. The drug, called PEG-Avonex, aims to be more convenient than but equally effective as Avonex, Biogen Idec's most important drug with $2.2 billion in sales last year.

Multiple sclerosis patients will take PEG-Avonex by injection every two weeks or every four weeks instead of the weekly injection required for Avonex.

Biogen Idec also said that patient enrollment has completed in the first of two phase III studies of the company's oral multiple sclerosis drug known as BG-12.

Both BG-12 and PEG-Avonex are important for Biogen Idec's future growth because of competition from Novartis ( NVS) and the German drug maker Merck KGaA, which are developing oral multiple sclerosis drugs of their own.

Both the Novartis drug, known as FTY720, and the Merck drug, cladribine, have posted positive results in phase III studies, and both companies have already announced plans to seek regulatory approval later this year.

All current multiple sclerosis drugs, including Biogen's Avonex and Tysabri, which it co-markets with Elan ( ELN), are administered by injections, which leaves them commercially vulnerable to an oral multiple sclerosis drug, if one can be approved that is equally or more effective with an acceptable safety profile.

But safety concerns, including an increased risk for fatal infections, cancer and heart and liver problems have weighed somewhat on the commercial viability of FTY720 and cladribine.

Biogen Idec tried to seize on these worries Wednesday by highlighting the clean safety record observed so far with BG-12.

"All the advantages of a multiple sclerosis pill go away if there are serious safety issues," said Al Sandrock, Biogen's research head in charge of neurology.

Oral multiple sclerosis drugs will get a thorough vetting by researchers and Wall Street next month at the American Academy of Neurology annual meeting, where full phase III data from Novartis' and Merck's drugs will be presented for the first time.

Later in Wednesday's investor meeting, Biogen presented new market research showing that 74% of neurologists expected to increase use of Tysabri over the next six months while only a small percentage of doctors, 3%, said they planned to prescribe less Tysabri.

Biogen pointed to this market research as evidence that Tysabri sales could rebound after falling back late last year due to additional reports of Tysabri patients being diagnosed with progressive multifocal leukoencephalopathy, or PML, a serious brain infection.

Tysabri sales rose 137% to $813 million in 2008, but in the fourth quarter Tysabri sales totaled $218 million, down 8% sequentially from the third quarter and well below Street estimates.

Wednesday, Biogen executives laid out plans to re-accelerate Tysabri patient growth, including new research into treatments that could potentially reverse the effects of PML.

Outside of multiple sclerosis, Biogen researchers highlighted data from drugs in development for cancer, immunology and pain management. Biogen expects to have nine drugs in phase III trials by the second half of the year.

Biogen shares closed Wednesday up 67 cents, or 1.3%, to $51.52.

Adam Feuerstein writes regularly for TheStreet.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; click here to send him an email.

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