Biogen Idec
Launch Date: April 2013
First-Half 2013 Sales: $192.1 million
Analyst Estimate for 2018: $3.78 billion
Known until just recently by its experimental name, BG-12, Tecfidera is one of those drugs that inspires great expectations. Doctors, multiple sclerosis patients, analysts--and Biogen Idec ($BIIB), of course--couldn't wait for it to hit the market. The only group that wasn't happy when Tecfidera rolled out in April 2013? Novartis ($NVS) and Sanofi ($SNY), whose earlier-to-market MS pills now face more head-to-head competition.
And Tecfidera represents impressive competition. Late-stage trials delivered solid statistics, showing that Tecfidera could slash the annual relapse rate, stave off lesion growth and slow progression to disability. The numbers compare favorably with those of both
its rivals. Safety-wise, Tecfidera so far stands clear of the sort of worries that afflict Aubagio, with known liver risks, and Gilenya, with heart-rate issues that recently prompted an FDA review. Plus, Biogen priced Tecfidera at $54,900 per year, less than Gilenya's $58,000 sticker.
So, when Biogen reported $192 million in first-quarter sales--more than twice the $70 million analysts had expected--bystanders were awed but not astonished. After all, analysts estimate $3.8 billion in sales by 2018, and that's just 5 years away. The launch was so successful, in fact, that it threw a wrench into Biogen's real estate plans. Rather than moving to the new HQ in Cambridge, commercial operations are expected to stay in Weston, MA, at least for now. The drug has come up against some reimbursement snags, but Biogen has countered those delays by offering Tecfidera for free to patients who have to wait longer than two weeks for reimbursement.
One key obstacle remains for the Biogen drug--marketing in the EU. Because of intellectual property concerns, the Cambridge, MA-based company decided to hold off on a European launch for now. Some believe European sales will eventually account for 40% of Tecfidera revenues, but securing the drug against generic competition is job one. Long-term, the company says, a delay will be worth the immediate cost.
Another development to watch: In July 2013, an MS patient who had been taking Tecfidera died while suffering from a form of pneumonia that tends to afflict MS patients. She had been using Tecfidera a little over 5 weeks. The company said it's investigating but that it's unlikely that its drug caused her death.
Biogen Idec Inc.
Expect Tecfidera to Beat with $220M+
Impact: BIIB reports Q3 results next Mon @ 9am ET. Based on IMS Rx trends, Tecfidera Q3 demand could be $220M+
First Impression
Reporting 3rd week of Q4:13 Multiple Sclerosis scripts.
Tecfidera TRx 4528, +2% wk/wk while "true" NRx is 769, -14% wk/ wk (reported NRx is 1855, -1% wk/wk)
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Despite light "true" NRx due to Columbus Day, TRx market penetration
reaches 13%, maintaining its lead over Gilenya and Aubagio combined of 12.3%. Even though the "true" NRx has stabilized at ~900 (as previously anticipated), the TRx shows steady growth (TRx +20% QTD vs. +104% Q/Q in Q3) as patient compliance remains high. At this rate, we believe Tecfidera could reach 15%+ market share by YE:13.
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Continue to reiterate that Q3 Tecfidera demand likely ~$220M
(without stocking) per weekly scripts, higher than cons of $206-220M.
Recall BIIB reported Q1 sales of $192M ($110M demand + $82M
stocking), closely in line with our TecfiAPP estimate of $103M. BIIB will
report earnings on 10/28 (Mon) at 9am ET.
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Headline Q3 tecfidera sales could be $300M+ according to IMS and
WK. WK monthly sales combined yields $273M for Q3 assuming 100%
capture rate. Given the capture rate in Q2 was quite low at 54%, if we
conservatively assume 90% capture rate for Q3, this yields $303M for
Q3. If stocking is similar to Q2 ($80M), we believe end-user demand
could be around $220M, which is in-line with trends from IMS monthly
sales data as well.
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Tecfidera tracking towards $700M+, according to our TecfiAPP. The
two biggest variables are: 1) refill/compliance rate; and 2) "true" NRx
normalization level. Both of these variable have stabilized over the past
quarter (refill rate at ~88%, "true" NRx at ~900). We believe these
are reasonable base assumptions going forward and anything above or
below would be up/downside.
