Biogen problem explains Teva jump

Why did Teva Pharmaceutical Industries Ltd. (NYSE: TEVA; TASE: TEVA) rise 2% on Wall Street yesterday? At first, it seemed that the reason was Teva's announcement of the formation of a Global Specialty Medicines group, but it turns out that problems at rival Biogen were the more likely cause.

Bloomberg reported yesterday that a Biogen psoriasis treatment called Fumaderm was linked to three fatal cases of a brain infection known as progressive multifocal leukoencephalopathy, or PML. Fumaderm is an earlier version of Tecfidera, Biogen's orally administered treatment for multiple sclerosis that competes with Teva's flagship product Copaxone, which is administered by injection.

Tecfidera (or BG-12 as it was formerly known) was approved by the US Food and Drug Administration for sale in the US less than a month ago. Analysts expect it to have sales in the billions of dollars in the coming years and to become the highest selling multiple sclerosis treatment. Copaxone currently has 40% of the market.

Biogen's share price fell 3% yesterday. Bloomberg quoted researchers from VU University Medical Center in Amsterdam as saying that the risk deserved attention since other medicines with the same active ingredients are emerging and may be used to treat a broader range of ailments, and researchers from Rheinisch-Westfalische Technische Hochschule Aachen as saying that fumaric acid, an active ingredient in Fumaderm, was probably an important factor in the development of the brain infection known as PML in one 74-year-old patient.

Bloomberg quotes Kate Niazi-Sai, a Biogen spokeswoman, as stating in response, "There havent been any cases of PML in 2,600 patients treated with Tecfidera, including those who have been on the drug for four or more years. The company provided the US Food and Drug Administration information about the cases before the drug won approval, and the agency raised no concerns."

Eric Schmidt, an analyst at Cowen & Co. in New York, told Bloomberg, "Fumaderm and Tecfidera are 'chemical cousins', not identical copies. Many psoriasis patients in Germany get the Tecfidera 'look-a-like' drug. I think people are going to shake this thing off. Its old data and not relevant to Tecfidera, given that its not the same drug."

Published by Globes [online], Israel business news - http://www.globes-online.com - on April 25, 2013

Copyright of Globes Publisher Itonut (1983) Ltd. 2013

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Biogen problem explains Teva jump