Biogen's Tecfidera faces new challenge as scientists call for brain infection monitoring

Markets reacted very poorly when Biogen ($BIIB) recently cut its earnings forecast on "headwinds" slowing Tecfidera sales because doctors are concerned about reports tying it to the rare but sometimes fatal brain infection known as PML. Now that wind has picked up after a report in leading medical journal predicted more cases of the disease and called for deeper studies of the risks.

The report from Norwegian scientists appeared Thursday in the New England Journal of Medicine, Bloomberg reported. The Journal piece said doctors can expect to see more cases of patients with progressive multifocal leukoencephalopathy as more patients take dimethyl fumarate, the active ingredient in Tecfidera. The scientists recommended more monitoring for risk of patients on drugs with dimethyl fumarate.

Biogen CEO George Scangos

Biogen's shares closed down 5.6% Thursday following release of the medical journal articles, Bloomberg reported. They were off further in midmorning trading today, down more than 6% in the last two days. Until the report Thursday, Biogen shares had been recovering in the two weeks since its market cap took an $18 billion haircut when it reported mixed Q2 earnings. In its earnings call, CEO George Scangos explained that an expected acceleration in sales for the once hot selling multiple sclerosis drug had not kicked in after the FDA last fall included a PML warning on the label for Tecfidera.

Scangos told analysts that Biogen was working to improve the Tecfidera trajectory and Thursday the company told Bloomberg in a statement that Tecfidera "continues to offer people living with MS a combination of strong efficacy and safety."

About 155,000 patients have been treated with Tecfidera worldwide, Bloomberg reports, and before the label change Tecfidera had been a hot seller, repeatedly beating analyst sales projections. Even after the change, Tecfidera pulled in $883 million in Q2 compared to $700 million in the same quarter last year.

Biogen recently reported a second case of a patient contracting PML while taking dimethyl fumarate, although this time the patient was not on Tecfidera. The patient in Europe was taking a high dose of a compounded version of a delayed release version of dimethyl fumarate. Separately, the FDA has warned of two cases of PML tied to Novartis' ($NVS) MS drug Gilenya, although it does not contain dimethyl fumarate.

But headlines about PML could be a problem for Biogen, UBS AG analyst Matthew Roden said in a note to investors reported by the news service. He told investors: "If the reported findings develop into a pattern of opportunistic infections, then we should expect increasing headline risk and potential headwinds to Tecfidera usage."

- read the Bloomberg story