Biogen plunges after rival drug for spinal muscular atrophy shows promise

  • Biogen tumbled 6 percent on Monday, after a rival drugmaker reported its experimental drug for spinal muscular atrophy helped a majority of babies who received it.
  • Biogen has a few new drugs in the pipeline, including one that could help the company defend its leadership in MS drug therapy, but these are at least two years away reaching the market.
Michel Vounatsos
Kevin Lee | Bloomberg | Getty Images
Michel Vounatsos

Biogen tumbled as much as 6 percent on Monday, after a rival drugmaker reported its experimental drug for spinal muscular atrophy helped a majority of babies who received it.

Spinal musclar atrophy is a rare genetic condition that prevents the body from developing a muscle protein called SMN. Without the protein, muscles atrophy and movement is impaired. Babies with the condition often die within 18 months.

Over the weekend, PTC Therapeutics presented promising research at the CureSMA researcher conference in Dallas. Over a stretch of 182 days, 90 percent of babies with Type 1 SMA that received the therapy demonstrated improvement in their conditions, including the ability to control their heads, roll or sit.

PTC Therapeutics' experimental drug poses a serious threat to Spinraza, the first drug that was approved to treat SMA. PTC is co-developing the drug with Roche.

Sales of Biogen's multiple sclerosis drugs have been declining due to the competition from several new generic and brand name MS drugs.

"Our HOLD-rating on Biogen reflects our concerns about declining sales in the multiple sclerosis franchise and slowing U.S. sales growth in Spinraza. We see the [Bigoen's] MS products facing heighten competition in 2018 and 2019 from generics and new brand name entrants," David Toung, Argus senior analyst, wrote in a note.

Biogen has two new drugs in the pipeline, including an MS drug it is developing in partnership with Alkermes that could help Biogen maintain its leadership in MS treatment. But Toung noted the new drugs "are at least two years away reaching the market."

PTC Therapeutics shares skyrocketed Monday to a new 52-week high of $52.95. Recently the stock was changing hands up about 25 percent at $46.83 in robust volume.

Novartis also is a pursuing an SMA therapy in the wake of its acquisition of Avexis. Its stock fell more than 2 percent in trading Monday.