Pharm firms suffer drop after MS drug comes under fire

Shares of Biogen Idec and Elan Pharmaceuticals, competitors of Teva, fell 7% and 17% respectively on Friday after the European Medicines Agency announced it would examine the benefits and risks of Tysabri, a multiple sclerosis medication sold by the two Teva competitors.

The European agency said it took the decision after 23 cases of a rare brain infection, progressive multifocal leukoencephalopathy, or PML, were diagnosed in MS patients who have taken Tysabri since the controversial drug's reintroduction in 2006.

The number of PML patients noted by the European Medicines Agency is much higher than the figure reported by the two companies. That fact could point to greater risks associated with the medication than were previously known and raises questions about the reliability of the two companies' reporting on the extent of the risk.

Like other MS drugs, Tysabri is administered by injection. But one of the drug's upsides is that unlike competing medications, it is given intravenously only once a week. Teva's Copaxone, for instance, is administered by daily injection.

Also, Tysbari is considered more effective than other medications and among other uses, is administered in serious cases of the disease, primarily to patients who have not responded to other drugs.

Indications of its effectiveness explain the growth in sales of Tysabri by 19% in the third quarter of 2009 to $282 million, and the rise in the number of patients using it by 30% at the end of September compared to September of 2008.

In addition, 63% of physicians questioned between June and August of this year said the therapeutic benefits of Tysbari outweighed its risks. This compares to 55% of physicians during the same period last year, when the first case of PML was reported after renewed sales of the product.

Tysbari was taken off the market in early 2005 after preliminary reports of three fatal PML cases, but was again made available for sale in June of 2006. Analysts had predicted the European Medicines Agency would not stop sales of the product, but would recommend that patients who have been on the medication for a long period temporarily stop its use, as it is thought the risk of PML increases the longer a patient uses Tysbari.

Biogen Idec confirmed last week that is was in touch with the U.S. Food and Drug Administration regarding a change in the labeling on the product so that there would be an indication of the link between the length of the use of the drug and the risk of PML.

A change in the labeling would hurt Biogen's marketing efforts. The company had argued that there was no connection between the two and said the risk of PML among patient taking Tysbari was 0.1%.

Teva loses patent suit

Teva suffered a legal setback last week when a U.S. court in Delaware ruled Teva had failed to prove that a patent for Vigamox, which is used to treat eye infections and is made by Nestle's Alcon unit, was invalid.

Teva had challenged the patent in 2006. If it had been successful, it would have been able to launch its own competing product in 2014, six years before the expiration of the Vigamox patent.

Teva has also filed an application to sell a generic version of the Bristol-Myers Squibb AIDS medication Reyataz. Teva made the request pursuant to a provision of the Hatch-Waxman Act in the United States, which would give Teva the right to be the exclusive marketer of a generic form of the AIDS drug if it can successfully appeal the validity of the patents on Reyataz, which currently expire in 2018.