October 15, 2007 / 11:58 AM / 12 years ago

UPDATE 1-Bayer shares rise after upbeat MS drug study

(Adds more details, share price, background)

FRANKFURT, Oct 15 (Reuters) - Shares in German drugmaker Bayer AG BAYG.DE rose more than 2 percent on Monday after a mid-stage study confirmed its experimental multiple sclerosis drug worked better than Merck KGaA’s (MRCG.DE) Rebif.

Bayer and its U.S. partner Genzyme GENZ.O said the data showed patients who had not previously been treated and took their drug, alemtuzumab, had a 73 percent reduction in the risk of relapse compared with those taking Rebif.

Bayer shares were up 2.1 percent at 58.85 euros at 1134 GMT, compared with a 0.2 percent dip in the German blue-chip DAX index .GDAXI. The stock rose as high as 58.94 euros, its highest in nearly a month.

Bayer shares have risen more than 40 percent this year on the back of positive news from its strong drug pipeline, which was boosted after its Schering acquisition.

Analysts said the latest Bayer data, released on Sunday, was promising, despite the risks that patients must be monitored on a monthly basis to avoid a potentially deadly side effect.

Bayer said no new idiophatic thrombocytopenic purpura (ITP) — a disorder reflected in low platelet count and increased risk of uncontrolled bleeding — was reported following six ITP cases in its preliminary data after two years.

“Given the confirmed outstanding and durable efficacy and considering no extra ITP case has been reported, we increase our peak sales expectations ... from $700 million to $1 billion,” WestLB analyst Andreas Theisen said in a note.

One patient in the trial died from a cerebral hemorrhage. Four were successfully treated, and one was identified but recovered without treatment.

Analysts at Citigroup were cautious and expected little threat to Merck’s blockbuster Rebif. Alemtuzumab is also known as Campath and is already marketed as a cancer treatment.

“With Phase III in 2012 at best, the serious side-effect profile and the likelihood of more autoimmune diseases coming to light in Phase III, we see Campath as being a niche product,” Amit Roy said in a note.

The Phase II trial tracked 334 patients with multiple sclerosis (MS), a chronic disease of the central nervous system in which the immune system can attack the brain and spinal cord.

The disease causes a wide range of symptoms including fatigue, difficulty walking, numbness and vision problems. It can progress to cause severe disability.

Bayer and Genzyme said last month they had started a late clinical trial with alemtuzumab for multiple sclerosis, with filing for marketing approval expected in 2011.

Genzyme and Bayer are co-developing the drug in oncology, multiple sclerosis and other indications. Bayer has worldwide marketing rights.

Last week, a Merck study failed to show that Rebif was better than rival Teva’s TEVA.O(TEVA.TA) Copaxone in treating MS.

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