A Changing of the Guard in Treating Multiple Sclerosis

Multiple sclerosis is a troublesome disease with a significant need for treatments that are easy to use, safe, and effective.

Previously, the multibillion-dollar market for MS treatment has centered on injectables like Teva Pharmaceuticals' (NYSE: TEVA) Copaxone, and Biogen's (NASDAQ: BIIB) Avonex and Tysabri.

A big market opportunityIn 2012, Copaxone raked in $4 billion in sales for Teva,and Biogen's Tysabri -- a drug that has had safety stumbles -- pulled in $1.6 billion last year and $387 million in the second quarter. Biogen's Avonex also remains a big seller, generating sales of $774 million in the second quarter, down 2% from a year ago.

But those drugs are less than ideal because they're self-injected -- something that causes many patients anxiety. According to studies, between 7% and 22% of the population suffers from blood/injection phobia, and as a result, self-injection treatments carry higher risk of non-compliance, potentially reducing patient outcomes and drug unit sales and volume.

A new class of drugsRecognizing the need for better treatment options, big pharma has a slate of new oral MS drugs hitting the market.

One of those is Novartis (NYSE: NVS) Gilenya, which was approved in 2010. The drug is growing quickly, with sales increasing 64% to $518 million in the third quarter. The growth is helping offset headwinds tied to generic competition for Novartis' blood pressure drug Diovan. The quarterly sales brought Novartis sales of Gilenya to $1.4 billion for the first nine months, up 66% from a year ago. Novartis recently gave doctors another reason to prescribe Gilenya, reporting that patients showed reduced brain volume loss when treatment starts sooner.

Last year, Sanofi's (NYSE: SNY) oral drug Aubagio gained FDA approval, and the EU recently followed suit, approving the drug in September. Aubagio carries a price of roughly $21,600 per year, which is likely to create some delays in rolling out through Europe as prices are negotiated. So far, Aubagio generated U.S. sales of 53 million euros in the first six months of this year.

And Biogen is set to report its first full quarter of results following the approval of its new oral MS drug, Tecfidera, earlier this year. Analysts expect Biogen's Tecfidera may capture peak sales of up to $3 billion annually.

That enthusiasm for Tecfidera is partially due to reports of shortages following the drug's launch, prompting some to estimate sales could achieve coveted $1 billion blockbuster status as early as next year. To do that, Biogen will have to overcome push back from insurers tied to the drug's $54,000 a year price tag -- a price slightly lower than Novartis Gilenya, but more than prior generation drugs Avonex and Tysabri.

In the second quarter, Biogen recorded Tecfidera sales of $192 million as wholesalers built up inventory.

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A Changing of the Guard in Treating Multiple Sclerosis