3 Drug Companies Treating Multiple Sclerosis

By usman iftikhar - July 12, 2013 | Tickers: ACOR, BIIB, RCPT | 0 Comments

usman is a member of The Motley Fool Blog Network -- entries represent the personal opinion of the blogger and are not formally edited.

In the last six months, the NASDAQ biotechnology index has risen by an impressive 26.72%. This means that biotech stocks, on average, had more than double the return of S&P 500 index. These impressive returns are, however, difficult to understand because medical news has not reported any major breakthrough treatment for the various dangerous diseases that exist today. This fact rings a bell in my mind and I ask myself whether these valuations are based on some solid information or not. It is not even possible to ascertain what percentage of biotech companies will be able to put drugs on the market in the coming months.

I have identified three companies that are involved in developing drugs for Multiple Sclerosis, or MS. For the purpose of this analysis, we must first understand what the disease is all about.

MS is a disease which is, at present, non-treatable. It is an auto-immune disease in which the bodys own immune system attacks the insulation around nerve fibers causing symptoms such as blurred vision, walking difficulties and fatigue. There are almost 400,000 Americans and more than 2 million people worldwide who suffer from MS. According to Sanford C. Bernstein & Company, the market for MS drugs is close to $14 billion annually with $8.5 billion representing the United States market only.

Stagnation for this company

With its major focus on developing an MS drug by the name of Ampyra, Acorda Therapeutics (NASDAQ: ACOR) is my first pick. The company has been pleased over the fact that its drug was accepted by the FDA for MS therapy. However, the use of the drug has only been found to improve the walking speed of MS patients.

As mentioned before, the disease causes a number of health problems and walking difficulties is just one of them. Therefore, a drug which only improves the walking speed of MS patients is not a very attractive solution for the disease.

Ampyra sales clocked at $266.1 million in 2012, and the companys net sales guidance is in the range of $285 million-$315 million for 2013. This company forecast solidifies my opinion that the drug is not a big hit in the market. Therefore, we can expect the sales of this drug to stagnate in the coming future.

Other than that, the company has also been conducting studies for diazepam nasal spray, which will help treat people with epilepsy who have cluster seizures (acute repetitive seizures). I dont expect the company to report any solid findings in the coming months. I would, therefore, give a sell recommendation to investors for this stock.

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3 Drug Companies Treating Multiple Sclerosis