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Can Biogen Keep The Party Going After A Flawless Drug Launch?

This article is more than 10 years old.

Sales of Biogen Idec's multiple sclerosis pill Tecfidera were $192 million in the second quarter, more than double Wall Street expectations. That includes $110 million of sales to patients and $82 million of sales to wholesalers. How exciting is that? Ask Mark Schoenebaum, at International Strategies and Investing Group, who titled a dispatch to clients "Holy Mother of All Launches." He says Wall Street analysts expected sales of $70 million, and his own polls of fund managers came in at about $90 million to $100 million. Shares are up 6% in pre-market trading.

A lot of the credit for a flawless marketing launch should go to Biogen's marketing honcho, Tony Kingsley, who has done an amazing job improving sales performance across the company's brands, which also include the MS drugs Avonex and Tysabri. Here's a reminder of his past performance, from my profile of Biogen chief executive George Scangos from December:

 Tony Kingsley had arrived six months prior to oversee U.S. sales. His nascent strategy was counterintuitive: Refocus on the company’s top seller, Avonex, rather than the shiny new thing, an MS drug called Tysabri. The latter, developed with partner Elan Pharmaceuticals, proved nearly twice as effective as other MS drugs at preventing the destruction of the protective coating around nerves, the main result of the disease. But it also increased the risk of a rare but deadly brain infection. It had been removed from the market shortly after it was approved in 2004, then relaunched. But despite the side effect, patients with severe MS wanted Tysabri, and sales were growing at a double-digit clip.

Avonex, on the other hand, needed marketing help, because it was competing with two fairly similar drugs as the first line for fighting MS. Kingsley was spending resources knocking on doctors’ doors and streamlining the marketing message to focus on Avonex’s 15-year safety record and convenient once-a-week dosing.

When Scangos asked him to show the results of his plan, Kingsley had a simple response: We don’t know yet. Scangos was instantly impressed by the thin answer. “If you don’t know if it’s working yet, the right answer is we don’t know if it’s working yet, not all kinds of statistics that are glitzy and designed to make it seem like it’s working before you really know,” Scangos says. “That’s the worst.” So they stayed the course, to strong effect. Avonex’s annualized growth rate ticked up three points to 8% a year and should hit $2.9 billion this year. Kingsley got promoted and is in charge of sales globally. Tysabri boomed, too, buoyed by a diagnostic test that helps doctors identify which patients are not at risk of the brain infection and can safely take the drug. Sales are forecast to hit $1.6 billion this year, up 43%.

The launch of Tecfidera was obviously the crucial task for Kingsley, and now he's aced it. Marketing will continue to be important, but the next test is how well Tecfidera does in the real world. The drug is much easier to prescribe than the other effective MS pill, Novartis' Gilenya, because patients on Gilenya need special tests and observation when they begin the drug. But how will it do in the real world?

"We have a lot of expreience with Gilenya," says Jeffrey Cohen, a neurologist at the Cleveland Clinic. "It took a while to work out the mechanics of getting it started but once people are on the medication they tend to do pretty well. I would say our experience with Tecfidera is that it's easier to start it, there's less required testing, but at least right after initiation there's more side effects. And we're seeing the side effects we expected which are GI side effects and flushing and we've had a fair number of people, perhaps 10% or 20%,discontinue the medication because of that."

Given the huge amount of share Tecfidera is taking from other drugs (75% of patients starting the medicine were switching from a competitor) that drop-out rate could still lead to very big sales for the drug, which now looks certain to be a blockbuster. So far, so good.