A Look at Four Major Players in Multiple Sclerosis Treatments

By Leo Sun - July 24, 2013 | Tickers: ALKS, BIIB, NVS, XNPT | 0 Comments

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

Multiple sclerosis (MS) is an unpredictable, debilitating disease that affects an estimated 2.1 million people worldwide. Although the disease is not usually fatal, it can have devastating effects on the central nervous system, causing poor coordination, extreme fatigue, blurred vision, blindness, slurred speech and a loss of memory and concentration. MS symptoms occur due to an autoimmune disorder in which the immune system attacks myelin, the protective insulation of the nerve fibers in the central nervous system (CNS). Many nerve fibers are severed and replaced by hardened tissue, slowing and disrupting neural pathways.

MS is tough to diagnose since symptoms can appear and disappear randomly, and symptoms can be mistaken for other diseases. Since the CDC in the United States does not require physicians to report new cases of MS, as it is not contagious or directly inherited, the total number of domestic MS cases is unclear at the moment. There is no cure for MS, only disease-modifying treatments, many of which require once-a-week interferon injections, which can cause flu-like symptoms.

Therefore, the biotech industry is fairly certain that orally administered MS medications will become a major growth market over the next few years, considering the comparably easier method of taking a few pills daily as opposed to interferon injections. Four companies in this race to create the next blockbuster MS drug are Biogen (NASDAQ: BIIB), Novartis (NYSE: NVS), Alkermes (NASDAQ: ALKS) and XenoPort (NASDAQ: XNPT) - and all four companies have had experienced varying degrees of success.

All eyes on Biogen

In the biotech industry, the most followed name in MS treatments is Biogen. Wall Street expects the companys new orally-administered MS drug, Tecfidera, to become a blockbuster drug over the next two years. When Biogen reports earnings on July 25, many investors expect the company to report over $100 million in Tecfidera sales during the quarter - much higher than the official consensus estimate of $65 million from JPMorgan. In fact, sales of Tecfidera are expected to exceed $400 million for 2013, and $1 billion in 2014.

Those lofty projections are due to the comparative simplicity of Tecfidera, which is taken twice a day as an alternative to traditional MS treatments. Tecfidera is not only important to Biogen, but it could also impact the future market for blockbuster drugs. A big miss on Tecfidera sales in their second quarter could bode ill for other companies, like Gilead Sciences, which have built their reputations on getting billion dollar medications to the market ahead of their rivals.

Will Novartis lose market share?

In 2010, Novartis produced the first FDA approved once-a-day MS pill, Gilenya, which stands to cede significant market share to Tecfidera. Gilenya is the textbook definition of a blockbuster drug - it generated $494 million in 2011 sales, $1.2 billion in 2012 and could hit $2.27 billion by 2016, according to Bloomberg analyst projections.

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A Look at Four Major Players in Multiple Sclerosis Treatments