Teva Pharmaceutical Industries Ltd. (TEVA, TEVA.TV) and Active Biotech (ACTI.SK) reported that their oral treatment for multiple sclerosis, called laquinimod, missed the main goal of a major study, marking a setback for an important drug for both companies.
In the two-year study, laquinimod failed to significantly reduce the number of relapses of the disease when compared to placebo, an important measure of effectiveness in treating the debilitating disease. However, Teva said an adjusted analysis shows that the drug was successful in reducing relapse and that it still plans to file for regulatory approval of the drug in early 2012.
The drug, which had positive data in an earlier study, was developed by Sweden-based Active Biotech and licensed to Teva in 2004.
With new uncertainty surrounding the drug, American Depositary Shares of Israel-based Teva dropped 7.3% to $43.25, hitting their lowest levels in more than two years. Shares of Active Biotech plunged 51% to 38 Swedish krona ($5.99) in recent Stockholm trading.
JPMorgan analyst Chris Schott said the data were "far from clean" and that there doesn't seem to be any precedent of other MS drugs being submitted for approval using similarly adjusted data.
"While laquinimod may still be viable, we expect Teva shares to reflect little value for this asset following this morning's release until we receive further clarity from the FDA on the product," Schott said.
Several European analysts noted that the data show that laquinimod's marketing potential had dropped considerably. Active Biotech will receive a royalty of between 10% and 20% of laquinimod's sales, with a higher rate in the Nordic and Baltic countries. Laquinimod makes up about 60% of the assets in Active Biotech's product portfolio.
The setback for laquinimod is a positive for other oral MS treatments. Novartis AG (NVS, NOVN.VX) sells Gilenya, the first and only approved MS pill that was launched last year. Previously, all multiple-sclerosis treatments were injected or given intravenously. Novartis's American Depositary Shares slipped 49 cents to $60.71.
Biogen Idec Inc. (BIIB) is developing BG-12, and initial data earlier this year showed strong effectiveness that some believe will make the pill a market leader. But like laquinimod, BG-12 must also confirm those results in major data that is expected to come before year-end. Shares of Biogen recently rose 2% to $103.98.
Multiple sclerosis is a chronic, inflammatory condition that occurs when the body essentially attacks its own central nervous system and can be disabling in advanced stages.
Teva, which sells injectable MS blockbuster Copaxone, is hoping laquinimod will give it a foothold in the emerging market for oral MS treatments amid concern for the future of Copaxone, which had $3.3 billion in sales last year and is facing challenges from generic companies.
An earlier study showed laquinimod significantly reduced the number of relapses of the disease and cut the progression of resulting disability, which had raised expectations for the second study.
The latest study, although it failed to meet its main goal, showed that initial MRI scans of the placebo and laquinimod groups weren't similar. After adjusting for the difference--an action that was already specified in the clinical trial design--the results showed that laquinimod was effective according to multiple measures.
But that analysis raises questions about whether regulators will want more information on the drug or accept the adjusted results. Typically, the U.S. Food and Drug Administration requires two major studies for approval of a drug to treat MS.
"Since this is predefined and it is the right thing to do scientifically, we believe the FDA will accept that, but of course we cannot predict the FDA response," said Rivka Kreitman, Teva's senior vice president of global innovative research and development.
Teva and Active both said the two laquinimod studies were very similar in their outcome. An Active Biotech spokesman described the company as "a small player that has never done anything like this, so we trust our partner very much."
The laquinimod study also included a reference arm of patients taking Biogen Idec's popular MS drug Avonex. The group wasn't designed for direct comparison to the other groups in the study, but showed that Avonex was more effective than laquinimod at cutting relapses and Avonex was less effective than the pill at delaying disability progression.
In the two-year study, laquinimod failed to significantly reduce the number of relapses of the disease when compared to placebo, an important measure of effectiveness in treating the debilitating disease. However, Teva said an adjusted analysis shows that the drug was successful in reducing relapse and that it still plans to file for regulatory approval of the drug in early 2012.
The drug, which had positive data in an earlier study, was developed by Sweden-based Active Biotech and licensed to Teva in 2004.
With new uncertainty surrounding the drug, American Depositary Shares of Israel-based Teva dropped 7.3% to $43.25, hitting their lowest levels in more than two years. Shares of Active Biotech plunged 51% to 38 Swedish krona ($5.99) in recent Stockholm trading.
JPMorgan analyst Chris Schott said the data were "far from clean" and that there doesn't seem to be any precedent of other MS drugs being submitted for approval using similarly adjusted data.
"While laquinimod may still be viable, we expect Teva shares to reflect little value for this asset following this morning's release until we receive further clarity from the FDA on the product," Schott said.
Several European analysts noted that the data show that laquinimod's marketing potential had dropped considerably. Active Biotech will receive a royalty of between 10% and 20% of laquinimod's sales, with a higher rate in the Nordic and Baltic countries. Laquinimod makes up about 60% of the assets in Active Biotech's product portfolio.
The setback for laquinimod is a positive for other oral MS treatments. Novartis AG (NVS, NOVN.VX) sells Gilenya, the first and only approved MS pill that was launched last year. Previously, all multiple-sclerosis treatments were injected or given intravenously. Novartis's American Depositary Shares slipped 49 cents to $60.71.
Multiple sclerosis is a chronic, inflammatory condition that occurs when the body essentially attacks its own central nervous system and can be disabling in advanced stages.
Teva, which sells injectable MS blockbuster Copaxone, is hoping laquinimod will give it a foothold in the emerging market for oral MS treatments amid concern for the future of Copaxone, which had $3.3 billion in sales last year and is facing challenges from generic companies.
An earlier study showed laquinimod significantly reduced the number of relapses of the disease and cut the progression of resulting disability, which had raised expectations for the second study.
The latest study, although it failed to meet its main goal, showed that initial MRI scans of the placebo and laquinimod groups weren't similar. After adjusting for the difference--an action that was already specified in the clinical trial design--the results showed that laquinimod was effective according to multiple measures.
But that analysis raises questions about whether regulators will want more information on the drug or accept the adjusted results. Typically, the U.S. Food and Drug Administration requires two major studies for approval of a drug to treat MS.
"Since this is predefined and it is the right thing to do scientifically, we believe the FDA will accept that, but of course we cannot predict the FDA response," said Rivka Kreitman, Teva's senior vice president of global innovative research and development.
Teva and Active both said the two laquinimod studies were very similar in their outcome. An Active Biotech spokesman described the company as "a small player that has never done anything like this, so we trust our partner very much."
The laquinimod study also included a reference arm of patients taking Biogen Idec's popular MS drug Avonex. The group wasn't designed for direct comparison to the other groups in the study, but showed that Avonex was more effective than laquinimod at cutting relapses and Avonex was less effective than the pill at delaying disability progression.
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