Biogen to build blood disorder drug franchise
BOSTON (Reuters) - Biogen Idec Inc, which makes the multiple sclerosis drugs Tysabri and Avonex, plans to build a portfolio of products to treat noncancerous blood disorders, according to its chief executive.
The company's goal is to reduce its dependence on its multiple sclerosis products and build a new franchise around its experimental drugs to treat hemophilia, an inherited disorder in which the blood does not clot properly.
Biogen has two hemophilia products in Phase III, or late-stage, development.
"If we are going to build a commercial infrastructure that is going to call on hematologists, then we can think about other products in this area," George Scangos, Biogen's CEO, told Reuters in an interview. "We are actively looking to build a hematology franchise, and will consider acquisitions as well as in-licensing."
Noncancerous blood disorders include inherited conditions such as Thalassemia, which causes a destruction of red blood cells that leads to anemia; and sickle cell anemia, in which red blood cells form an abnormal crescent shape and deliver less oxygen to the body, potentially causing abdominal pain, bone pain, delayed growth and fatigue.
"There are many nonmalignant hematological diseases that affect large numbers of people which aren't well-treated," Scangos said.
Biogen, which ended 2010 with $2 billion in cash and marketable securities, has sometimes been criticized for being too conservative, emphasizing stock buybacks over new product acquisitions. Between 2004 and 2010, Biogen returned $8 billion to shareholders in the form of stock repurchases.
Scangos, who took over as CEO last July, said the company will continue to buy back shares, but also plans to be more aggressive in buying new products, especially those in early and mid-stage development.
"I don't think the two are mutually exclusive," he said. "We don't need any more Phase III products right now, but we don't have enough compounds in Phase I and Phase II to generate a robust Phase III pipeline some years down the road."
The company already has several experimental multiple sclerosis drugs in its pipeline. Now it is branching out into other neurological disorders, such as Lou Gehrig's disease, Parkinson's disease, other forms of neurodegenerative disorders and dementia.
"There are actually many types of dementia aside from Alzheimer's disease that are fairly common that are often misdiagnosed," Scangos said. "So we are putting a lot of effort into imaging and biomarkers to be able to identify and distinguish them early."
The idea of building a blood disorder franchise around Biogen's hemophilia drugs is relatively new.
"Before I came here, when I was looking at the company from the outside, the hemophilia products looked like add-ons to me," Scangos said. "But when I got here and looked at the data, I did a 180-degree turn.
Now the company, which generated revenue of $4.7 billion in 2010 and net profit of $1 billion, sees blood disorders in general as a new area of potential growth.
Patients with hemophilia lack, or are deficient in, certain proteins called clotting factors that help stop bleeding. The factors are numbered using Roman numerals. The two main forms of the disease are hemophilia A, caused by a lack of clotting factor VIII, and the less-common hemophilia B, caused by a lack of clotting factor IX.
There are multiple treatments on the market for these forms of the disease. Currently the global market for Factor VIII products is about $5 billion, while the market for Factor IX is worth about $1 billion. But the drugs, in general, must be infused three or more times a week.
Biogen's Factor IX product is designed to stay in the body up to three times longer than existing drugs, meaning patients would require an infusion only once a week. The company does not have data yet on exactly how much longer its Factor VIII product lasts.
While patients are typically reluctant to switch products, Scangos said he believes the attraction of fewer infusions will be a powerful motivator.
"If you are a kid or young adult and you can get an infusion once a week instead of every other day, that's huge."