Event – Amyotrophic lateral sclerosis success could empower Biogen

Analysis

While multiple sclerosis and haemophilia have hogged the limelight as key pillars of Biogen Idec’s post-Avonex strategy, the company might have another ace up its sleeve.

Dexpramipexole has been making quiet progress in amyotrophic lateral sclerosis, and its phase III Empower study should read out by the end of the year. The project stands as the most advanced hope for treating the neurodegenerative disease, which has been plagued by late-stage failures. Its effect on functional measures and mortality in the 943-patient trial will show whether it has a shot at what could become a blockbuster indication.

Company Biogen Idec
Product KNS-760704
Market cap $35.3bn
Product NPV $196m
% of market cap 1%
Event type Phase III results
Date Q4
Indication Amyotrophic lateral sclerosis (ALS)
Trial ID NCT01281189

Consensus expectations for dexpramipexole, also known under the lab code KNS-760704, are very low-key, with sales of just $122m within five years of a 2013 launch.

But the trick lies in expanding the size of the ALS market. The disease at present is treated with Sanofi’s Rilutek, which confers a modest two to three-month survival benefit and generates annual sales of under $200m. A drug with disease-modifying potential could grow this to $1-2bn, some analysts believe.

Misplaced selling?

Biogen Idec’s shares are up 36% on the year and currently value the company at $35bn, with momentum driven by hopes for BG-12, a filed project with huge potential in multiple sclerosis, and the group’s long-acting haemophilia agents. But there has been some weakness of late, which ISI Group’s Mark Schoenebaum puts down “misplaced selling” ahead of the dexpramipexole data.

“I think the risk-reward in the ALS data is quite favourable,” he said on a recent webcast, with the worst-case scenario – outright failure of Empower – translating into a 10% share price dent. “But if it’s a huge success – not just hitting the p value but really meaningful – people are going to come out with $2bn estimates.”

Mr Schoenebaum thinks the probability of a knockout result is one in five, but says the upside is “just giant ... I’m not sure people really understand that”. Indeed, there are reasons to be hopeful. In a 102-patient phase II study designed mainly to show tolerability, dexpramipexole found trends in slowing disease progression and prolonging survival.

The promise held by ALS and the rare condition’s eligibility for orphan drug status, which dexpramipexole holds, had piqued industry interest, but success has been elusive, likely adding to worries around dexpramipexole’s chances of success.

Late-stage failures include Trophos’s olesoxime and Teva’s talampanel, while arimoclomol had been under clinical hold before being divested by CytRx and is now only in investigator-sponsored trials. Behind dexpramipexole Mitsubishi Tanabe Pharma and Eisai are conducting small phase III studies of edaravone and mecobalamin, respectively.

Dexpramipexole is an isomer of pramipexole, a now off-patent antiparkinsonian drug sold by Boehringer Ingelheim as Mirapex. Unlike Mirapex it is thought to work as a neuroprotectant, although the exact mechanism in ALS is not known. It is hoped that its reduced dopamine agonism might allow it to be dosed higher, and this might also provide a useful barrier against off-label use of generic pramipexole.

Remarkable deal-making

It is noteworthy that dexpramipexole, like BG-12, found itself in Biogen Idec’s pipeline thanks to deal-making that on purely financial metrics has been little short of remarkable.

BG-12 came through the acquisition of Fumapharm for just $220m in 2006, while dexpramipexole was licensed from Knopp Neurosciences four years later in a deal worth $26m up front plus a $60m equity stake (Biogen's deal with Knopp will swell phase III ALS pipeline, August 19, 2010). Knopp is owed up to $265m in milestones plus royalties, while Fumapharm’s remaining milestone interest was recently acquired by Royalty Pharma for $761m.

The deal terms notwithstanding, dexpramipexole remains a high-risk bet, and Deutsche Bank said in a recent note that, owing to “high patient variability and a mountain of past clinical failures, we have a difficult time assigning value to this pipeline candidate”.

But if Empower yields a knockout result the reward could be even higher than the risk.

To contact the writer of this story email Jacob Plieth in London at jacobp@epvantage.com

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