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Biogen's anti-LINGO shows mixed results in study

Biogen Idec's most-watched experimental therapy, known as anti-LINGO-1, showed potential in a midstage study to reverse the nerve damage associated with acute optic neuritis. It's a hint the drug may work more broadly to reverse the damage in multiple sclerosis, an opportunity Credit Suisse pegs at more than $10 billion.

But some analysts said the results lacked clarity on the drug's ultimate potential success, and the stock declined after initially jumping as much as 7 percent pre-market.

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Multiple sclerosis is characterized by damage and scarring to the myelin sheath, a protective layer around nerves; remyelination is the reparation of that damage. This study, dubbed RENEW, was in acute optic neuritis, or inflammation of the optic nerve, which is often associated with multiple sclerosis. The company and investors saw these data as potentially indicative of the drug's potential in MS.

"This is the first clinical trial to provide evidence of biological repair in the central nervous system by facilitating remyelination following an acute inflammatory injury," Biogen chief medical officer Alfred Sandrock said in a statement.

Biogen
Suzanne Kreiter | The Boston Globe | Getty Images

Biogen said the drug showed an improvement in the study's primary endpoint, recovery of the optic nerve's ability to transmit a signal from the retina to the visual cortex. While the results showed a positive trend, the data weren't statistically significant, Biogen said. The study showed no effects on secondary goals in the study.

"It's hard to get excited about these results," Piper Jaffray analyst Joshua Schimmer wrote in a research note Thursday. "We will see if the program delivers clinical benefit in the MS setting in 2016 and do not include it in our model or valuation."

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Other analysts interpreted the data more positively.

"Importantly consensus did not expect statistical significance and did not know what the data could showso the fact it has some 'positive trends' on improving nerve repair is an interesting concept," RBC Capital Markets analyst Michael Yee wrote in a note to clients.

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Credit Suisse analyst Ravi Mehrotra estimated before the data were reported that anti-LINGO-1 could draw more than $10 billion in annual revenue if it works in multiple sclerosis. Data in MS are expected in the first half of 2016, Yee said.