Why This Big Biotech Could be Biogen's Downfall

February 2, 2017
By Alex Keown, BioSpace.com Breaking News Staff

SUMMIT, N.J. – Could Celgene ’s experimental multiple sclerosis drug ozanimod take a bite out of Biogen ’s share of the market?

Ozanimod is a selective, sphingosine 1-phosphate 1 (S1PR1) and 5 (S1PR5) receptor modulator in development for immune-inflammatory indications including relapsing multiple sclerosis, as well as inflammatory bowel disease. In October, Celgene announced positive results from a two-year Phase II trial of ozanimod. The trial showed the oral drug met its primary efficacy endpoint of reduction in the cumulative number of total gadolinium-enhancing (GdE) lesions. Trial data showed that patients were still experiencing benefits even after 96 weeks. What might be most important, as Todd Campbell pointed out in The Motley Fool, there were not any safety concerns with patients taking ozanimod. Celgene acquired ozanimod in 2015 when it bought Receptos for $7.2 billion.

If the drug continues through Phase III development, that could be a positive sign for the drug’s marketability, especially since Biogen’s Tecfidera, the dominant oral MS drug, has shown some safety issues concerning a rare and life-threatening brain disease called progressive multifocal leukoencephalopathy, Campbell said. That safety concern could make more doctors willing to prescribe ozanimod, he said.

Not only could ozanimod directly challenge Biogen’s hold on the market, but it will also take on rivals Novartis and Sanofi and their drugs, Gilenya and Aubagio, respectively. Tecfidera and Gilenya generated more than $3 billion last year for their companies and Aubagio brought in about $2 billion, Campbell said.

In addition to Tecfidera, Biogen also has the recently-approved injectable Zinbryta for treatment of the relapsing form of MS. However, that drug, co-developed with AbbVie , comes with a boxed warning, the most serious warning label provided by the regulatory agency. The FDA recommends the drug be prescribed to patients who have had an “inadequate response to two or more MS drugs” due to safety concerns.

Multiple sclerosis is a chronic, inflammatory, autoimmune disease of the central nervous system that disrupts communication between the brain and other parts of the body. MS affects more than 2.3 million people worldwide. Relapsing MS is the most common form of the disease, accounting for 85 percent of cases.

Biogen has had a few setbacks in developing MS treatments. Last year, Biogen’s opicinumab (anti-LINGO-1), failed to reach endpoints in its Phase II trial which caused company stock to plunge, and Biogen lost $8 billion in market value in one day. Fox Business reported that Biogen also abandoned future development of MT-1303, an experimental S1P receptor antagonist product for MS.

Although Campbell is high on ozanimod’s potential, he said investors should always remember that approximately 40 percent of Phase III drugs fail.