Little is known about the oral drug, which is in phase one trials. But in RBC's note published on Sunday, analyst Michael Yee and his associates wrote that it could be a "remyelinating drug" that somehow inhibits the enzyme autotaxin, or ATX.
Myelin is an insulating layer around the nerves. In MS patients, the myelin becomes progressively damaged. MS therapies have targeted overactive immune responses, but newer therapies are also looking to promote remyelination.
ATX is believed to induce remyelination, Yee noted.
MS is a chronic, inflammatory, autoimmune disease of the central nervous system. Biogen is a leader in MS treatments.
Disclosure that the new drug might be an oral remyelination drug could lead to "investor enthusiasm," Yee wrote, noting that oral drugs are preferred to injectable ones.
Biogen's oral therapy drug Tecfidera, approved in the U.S. last year, took in nearly $400 million in sales in the fourth quarter, helping Biogen post a record $1.97 billion in revenue in the quarter.
Tecfidera, which treats relapsing forms of MS, has been shown to reduce key measures of disease activity, including relapses and development of brain lesions.
"Our checks suggest that contrary to some belief, this is not a second-generation Tecfidera compound," Yee wrote of the new drug, dubbed BIIB-061.
BIIB-061 might work well in combination with another remyelination drug in trials, based on the leucine-rich protein Lingo-1, which together could drive the next generation of MS therapies, the research note said.
Yee noted that Biogen has been "doing a lot of work" on the new drug, including filing for multiple "composition of matter patents" and methods of use for novel ATX inhibitors.
Data from the phase one trial is expected in the second half of 2014, Yee wrote.
Biogen rose 2% in afternoon trading in the stock market today, while major indexes declined.
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