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   Biotech / MedicalBiogen

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From: mopgcw10/24/2009 11:16:18 AM
   of 1686
CS: Biogen Idec. Inc. (BIIB) NEUTRAL [V] M. Aberman
CP: US$ 47.23 TP: US$ 54 CAP: US$ 13.6b
PML Cases Suggest Higher Risk

• Action/Event: The CHMP of EU started a review of Tysabri in view of 23 cases of PML since the re-launch. The last official
update provided by Biogen listed 11 confirmed cases on July 24th. During ECTRIMS in September another 2 cases were
reported, suggesting 10 more cases have emerged since mid-September. Based on these cases and the number of Tysabri
patients who have been on therapy for longer than 24 months, we estimate the risk of PML could be as high as 1.4 in 1,000,
which is greater than 1 in 1,000 currently on the label.

• Investment Case: As previously communicated by the company on its 3Q conference call, Biogen is discussing label changes
with regulatory authorities. During the call, we found it curious that Biogen had changed their tune and agreed that the risk of
PML increased with duration of therapy. With this news, we now understand why. We expect the new label will highlight the
increased PML risk associated with longer duration of therapy. In addition, we think EU will institute a stricter risk
management program for Tysabri similar to the TOUCH program in US. Ultimately, we see a slowdown in new patient
additions and more drug holidays or switch to other therapies after a certain time of period. The bottom line is we will see a
deceleration in Tysabri growth worldwide. Given the declining Avonex and Rituxan revenues coupled with the slowing growth
of Tysabri, we remain cautious on Biogen shares.

• Catalysts: The next catalyst for Biogen Idec will be the ocrelizumab Phase II data in MS.

• Valuation: Our 12-month price target of $54 for Biogen is based primarily on a P/E analysis, where we apply a 12.5x multiple
on our 2010E EPS of $4.26 (including stock options) to derive a $54 fair value.

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From: mopgcw11/3/2009 4:30:43 PM
   of 1686
Barrons; Biogen's a Buy Jefferies & Co. sees nearly 20% upside from current levels.

Biogen Idec (BIIB: Nasdaq)
By Jefferies & Company ($42.13, Nov. 2, 2009)

WE ARE UPGRADING Biogen to Buy from Hold on valuation; maintaining our price target of $50, about 19% upside to current share price.

We view current valuation largely priced in for Tysabri concerns, posing limited downside; we are upgrading to buy. While we acknowledge that Biogen lacks apparent major positive catalysts near term, we believe its current valuation as attractive for (1) inexpensive valuation (trading at about 10x our estimated 2010 earnings versus peer average of about 13 times); (2) strong free-cash-flow yield (about 8%-10% versus peer median of about 6%); and (3) potential share-price appreciation from proposed share buyback (about 8% of outstanding shares).

Strong free cash flow (FCF) enables Biogen to return value to shareholders through share repurchases or dividends. Despite its high research and development spending as a percentage of total revenue (about 30% vs. about 23% for peers), Biogen's FCF is the second highest among peers, with about 10% FCF yield in 2010 by our estimate (versus peer median of about 6%).

At current depressed valuation, we expect the recently announced share repurchase of up to $1 billion is likely to accelerate in near-term. This represents about 8% of BIIB's current outstanding shares. BIIB has about $3 billion in cash/investments, with its long-term debt-to-capitalization ratio of about 14%.

Unpredictability of additional progressive multifocal leukoencephalopathy (PML) from Tysabri long-term therapy continues to be a concern; however, Tysabri withdrawal from the market is highly unlikely (according to regulatory consultant). Currently, ongoing label change discussions will likely include the increased duration of Tysabri therapy as a risk factor for PML. Experts commented that Tysabri label changes might curtail some use in greater than 24-month treatment, but this could be potentially offset by increased use in short-duration treatment. While experts do not see the risk of Tysabri being pulled off the market (unless PML incidence reaches 1/50), they note that a higher incidence than about 1/500 PML cases at greater than 24-month duration of therapy could make them more cautious.

Our valuation analysis indicates limited downside to Biogen shares. We estimate a pure-base value of Biogen at about $38/share (without Tysabri), about $44 if Tysabri sales decline by 50% from our current assumptions, about $49 if Tysabri sales decline by 25%.

Our $50 price target is 15 times our 2010 estimated earnings per share of $4.34, discounted back at a 30% annual rate. The price-to-earnings ratio is roughly in-line with the 2009 P/E multiple for the peer group. Risks include, but are not limited to: (1) higher-than-expected current PML rates, negatively impacting Tysabri sales growth; (2) growing competition in oral multiple sclerosis drug development; and (3) potential generic Interferon (IFN) beta impact in EU sales.

-- Eun K. Yang, Ph.D.
-- Kimberly Smith
-- Lunan Ji
-- Marko Kozul, M.D

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To: mopgcw who wrote (1657)1/22/2010 4:08:11 PM
From: tuck
   of 1686
Biogen will alert Drs. on a password protected website regarding further cases of PML. Investors have to contact IR. Another system skewed towards firms with medical consultants. Mid month. I suspect IR is going to be very, very, busy then. Another thing one could monitor would be large put buys on Elan and Biogen at those times . . .

>>Biogen Revises Brain Infection Disclosure Policy For Tysabri
Last update: 1/22/2010 2:32:30 PM

By Thomas Gryta

NEW YORK (Dow Jones)--Biogen Idec Inc. (BIIB) will communicate with doctors once a month on the occurrence of new cases of a rare brain infection in patients using its multiple sclerosis treatment Tysabri, as the biotech strives to find the right balance in keeping the medical and financial communities updated on that important number.
The situation is closely watched because Tysabri, a highly effective treatment sold with Elan Corp. (ELN), was previously pulled from the market because of its association with progressive multifocal leukoencephalopathy, or PML, a debilitating and often fatal condition. The infection rate has hurt the sales growth of the drug, which is key to Biogen's future and is Elan's biggest seller.
Since its re-emergence in 2008, Biogen and regulators have struggled with how to provide information on PML because case-by-case updates of a specific side effect are unprecedented. Last summer, the Cambridge, Mass., company stopped providing updates altogether.
As of mid-January, the number of cases stands at 31, which puts the overall incidence rate at about 1-in-1,000 patients, as implied by the drug's label.
Under the new plan, Biogen will proactively update physicians midmonth and provide information through a password-protected Web site. It will include the number of PML cases, with an incidence rate broken down by duration of use, as well as a cumulative patient exposure figure, which is different then the quarterly patient count provided to investors.
Investors can get the same information from investor relations, although the company won't be posting it on a public web site or making an announcement.
Patient services will provide Tysabri users with information upon request, although not with the level of detail given to physicians, or even to investors.
The reason for the disparity between how doctors and patients are updated is because of regulations that restrict direct interactions between patients and drug companies, because those communications could be deemed as promotional activities and thus need to be cleared with regulators.
Major developments would be communicated outside of the regular updates and regulators will continue to receive information on a realtime basis.
Biogen withdrew the drug from the market for 18 months beginning in 2005 after three patients developed PML. Infections re-emerged in 2008, and Biogen provided regular weekly updates to the public until last July, when it officially stopped providing any information.
In October, European and U.S. regulators said the number of PML cases had risen to 24, well above Biogen's July disclosure of 11, surprising Wall Street and raising questions about Biogen's disclosure policies and refusal to comment on PML case numbers. The company began to re-think its approach at about the same time.
"We just realized that that just wasn't going to work," said Biogen spokeswoman Naomi Aoki, who noted that information about new cases continued to become public through other sources despite the company's decision to not comment.
"It fueled a greater fear factor than being consistently transparent about the information," she said. "This [change] is driven by what the medical community needs and wants."
On Thursday, the European Medicines Agency's Committee for Medicinal Products for Human Use, known as CHMP, recommended increased risk-mitigation measures for Tysabri after reviewing its safety. The panel concluded that Tysabri's benefit for MS patients outweighs its risks and the drug should stay on the market.
Tysabri had more than $1 billion in 2009 sales, but its controversial history has provoked fear in investors and confusion about the disclosure of new cases hasn't helped.
Biogen's stock was up 12% in 2009 and Elan rose 9%, compared with a 23% rise in the S&P 500, and both stocks saw plenty of Tysabri-related volatility. This month, Biogen Chief Executive James Mullen said the share price has been "bound by uncertainty over Tysabri."<<

Cheers, Tuck

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To: tuck who wrote (1658)1/22/2010 4:21:06 PM
From: mopgcw
   of 1686
i saw they announced a few more cases.

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From: mopgcw3/8/2010 11:47:56 AM
   of 1686
WSJ: Roche, Biogen Suffer Setback With Experimental Drug

ZURICH--Roche Holding AG and Biogen Idec Inc. said Monday they suspended a rheumatoid arthritis program using drug candidate ocrelizumab because of safety concerns, further cutting the experimental drug's market potential.

The suspension was recommended by the independent Data and Safety Monitoring Board, or DSMB, which found risks outweighed potential benefits after cases of serious infections led to several deaths. It follows earlier program halts in the ocrelizumab treatment of lupus and rheumatoid arthritis, two autoimmune diseases.

"The decision to put the trial on hold doesn't come as a surprise as earlier programs have already been stopped," said Birgit Kulhoff, analyst at private bank Rahn & Bodmer, who has the stock on its recommendation list. "Given the U.S. Food and Drug Administration's intense focus on safety, the chance that the product won't make it to market is very high now," she said.

Shares of Roche, which have gained around 51% over the past twelve months, showed little reaction to the news as investors were expecting another trial setback for ocrelizumab. They were down 0.6% at 179 Swiss francs ($166) in late morning trading.

"Patient safety is of the utmost importance in all of our drug development programs," said Roche's Chief Medical Officer Hal Barron. "In light of the DSMB recommendations we have decided to suspend ocrelizumab treatment in the rheumatoid arthritis clinical development program."

Ocrelizumab was expected to reach peak sales of between $1 billion to $2 billion in the three indications rheumatoid arthritis, lupus and multiple sclerosis. If approved, the drug could have helped Roche to manage the life-cycle of its cancer drug Mabthera, which loses its patent protection over the next five years, according to analysts.

Roche said it will first analyze the program data in question before deciding on the future of the biological drug in the treatment of rheumatoid arthritis. Ocrelizumab will be further studied in the treatment of relapsing-remitting multiple sclerosis, which is currently in Phase II trials, Roche said.

Although Roche will continue with its MS trial, Helvea analyst Karl-Heinz Koch said that based on the latest safety data, "the chances of the drug to continue its clinical path in the relapsing-remitting multiple sclerosis is increasingly unlikely."

Mr. Koch, who rates the stock at buy, expected peak sales of around 800 million Swiss francs. However, due to the increased likelihood that these trials could be halted too, he has removed the sales estimates from his model, cutting the company's share-price target to 191 francs from 195 francs.

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To: mopgcw who wrote (1660)3/8/2010 12:57:36 PM
From: scaram(o)uche
   of 1686
Thanks for that!

Does anyone have a clue to the "why?" part? That is, why would it be worse (or is it?) than rituxan?

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To: scaram(o)uche who wrote (1661)3/11/2010 1:48:28 PM
From: Pseudo Biologist
   of 1686
We can start with the what

As you may recall Rituxan is chimeric 2B8

Ocrelizumab is humanized 2H7

So, the CDRs are not 100% identical, though they are very close:

In the LC each of the 3 CDRs differs from 2H7 vs 2B8 by 1-2 amino acids. In the HC 2 of the 3 CDRs are identical and the third differs by a few amino acids.

For reasons that are not altogether clear, ocrelizumab has better ADCC and slightly worse CDC than Rituxan. (see for example where the ADCC item is stated; I have seen the actual data presented in conferences, but I am not sure this second if published more formally).

No need to tell you this, but I think without more detail on dosing and the like it is hard to say for sure that ocrelizumab is indeed worse (more toxic). Even assuming one could an apples to apples comparison of trials, it is hard to see why the ADCC/CDC observations alone would account for such a difference. Data on how patients with different Fc receptor polymorphisms do may shed some light on this.

Very tricky business this one of making so-called "bio betters."


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To: Pseudo Biologist who wrote (1662)3/11/2010 1:56:24 PM
From: scaram(o)uche
   of 1686
Very tricky business this one of making so-called "bio betters."

Years and years of THE expert commentary. Thank you for all that you've done for us, lots and lots of us. Can't think of anyone who I respect more highly.

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To: scaram(o)uche who wrote (1663)3/11/2010 7:19:23 PM
From: Pseudo Biologist
   of 1686
Sure, thanks, now I am blushing. But, can my rambling help anyone make any money? ;->


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To: Pseudo Biologist who wrote (1664)3/11/2010 7:49:53 PM
From: scaram(o)uche
   of 1686
Sure, yes. If they're into protein constructs and digging for leveraged investments, the sophisticated investor knows you. In the old days, I turned lots of your stuff into gold. Now I'm lazy.


Yes, definitely.

But biological roulette is hard, sometimes it's going to beat every brain around.


Best! Rick

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