PropThink: ELN Under Pressure On ECTRIMS Meeting & Valuation

By David Moskowitz

With Biogen-Idec`s (BIIB) new multiple sclerosis (MS) treatment, BG-12, approaching a decision by the FDA (PDUFA date December 28th), enthusiasm in the medical community is building for this highly effective, safe, and orally administered treatment for the disease. As we noted in a prior article, the chance that BIIB would acquire Elan Corp. (ELN) given the impending launch of BG-12 appears to be slim to none (see PropThink`s prior story here). Importantly, the large medical conference, ECTRIMS (European Committee for Treatment and Research In Multiple Sclerosis) starts Wednesday, and we are hearing that the noise on BG-12 in the research community and on Wall Street is building significantly, with physicians indicating that most newly diagnosed patients and patients moving to alternative treatments will likely end up on BG-12 therapy given its clear benefits.

That`s a big problem for ELN, given that its lead value driver and MS treatment, Tysabri, heavily depends on new patient starts to maintain and grow its sales base. Tysabri sales are currently growing in the 13-15% range, and unlike BG-12`s oral preparation, Tysabri is administered in a hospital or clinic as a one hour IV infusion. In addition, because of the drug`s impact on the immune system, Tysabri has the potential to cause a condition called PML, which can be deadly for some patients. A test for the JC virus, which is the culprit in causing PML, is being used to help doctors and patients assess the risk of this deadly side effect. However, despite rising use of this assay, the number of "net new patients" taking Tysabri (new patient starts minus those discontinuing treatment) has been declining over the years on both an absolute basis as well as by percentage.

You can read the rest of thisstory, which includes a comparison of the two drugs, by clicking here.

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PropThink: ELN Under Pressure On ECTRIMS Meeting & Valuation