UPDATE 3-Biogen MS drug meets main goal in late-stage study

* BG-12 also hits secondary goals

* Shares rise more than 5 percent
(Updates with analyst comment, background)

By Toni Clarke and Lewis Krauskopf

BOSTON/NEW YORK, April 11 (Reuters) – Biogen Idec Inc’s
(BIIB.O: Quote, Profile, Research) experimental multiple sclerosis drug met the main goal
in the first of two important late-stage studies, the U.S.
biotechnology company said on Monday.

Biogen shares rose more than 5 percent amid optimism the
drug, if approved will strengthen Biogen’s position in the
highly competitive market for multiple sclerosis drugs.

The drug, BG-12, also met the secondary goals of the study,
according to Biogen, which sells the multiple sclerosis
treatments Tysabri and Avonex.

In the study of more than 1,200 patients, BG-12
administered either twice or three times a day showed a highly
statistically significant reduction in the number of patients
who relapsed at two years compared with placebo.

Many analysts had not expected the drug to achieve a
statistically significant result when given only two times a
day.

“BG-12 is not assumed in our model and could be a modest
contributor over time to offset flat to declining sales of
Tysabri and Avonex,” said Geoff Meacham, an analyst at J.P.
Morgan in a research note. “Overall, BG-12 data, while
positive, are not enough for us to move to a more positive
stance.” The company has a “neutral” rating on the stock.

This week, at the annual meeting of the American Academy of
Neurology, data will be presented from rival companies,
including Teva Pharmaceutical (TEVA.TA: Quote, Profile, Research), which could give an
indication of how BG-12 might stack up against new
competitors.

“While today’s news is a positive and above expectations,
we are still cautious going into the AAN meeting this week,
given data from other developmental compounds should highlight
the growing competition in the MS space,” Meacham said.

While most MS drugs are currently injected or infused, the
battleground is increasingly for pills, such as BG-12, that can
be taken orally.

Strong competition is expected from Novartis AG’s (NOVN.VX: Quote, Profile, Research)
recently launched oral pill Gilenya, and an experimental drug
in development from Teva Pharmaceutical Industries (TEVA.O: Quote, Profile, Research)
called laquinimod, is also seen as potentially strong
competition. Teva will be releasing additional data about the
drug at the AAN meeting.

An injectable drug being developed by Genzyme Corp, which
recently agreed to be acquired by Sanofi-Aventis SA (SASY.PA: Quote, Profile, Research)
could also present competition as it has shown superior
efficacy, but some analysts are concerned about its side effect
profile.

The overall incidence of side effects was similar among
patients taking BG-12 and those taking a placebo.

Biogen released initial top-line results of the study, and
said full data would be presented at a future medical meeting.

Results from a second Phase III study are expected in the
second half of this year.

Biogen is based in Weston, Massachusetts. It’s shares rose
5.6 percent to $77.37 in early trading on Nasdaq.
(Reporting by Lewis Krauskopf, Editing by Maureen Bavdek, Dave
Zimmerman)

UPDATE 3-Biogen MS drug meets main goal in late-stage study