Capitalizing on the News
Oral treatments are the future of the MS market. While health complications with certain oral treatments have recently arisen, the problems in these up-and-coming drugs are likely to be worked out over time.
In correspondence with a recent report released by Research and Markets, the consensus displays the global multiple sclerosis market growing from $14.4 billion currently to $16.6 billion by 2017. The report primarily credits this growth to the “entry of new pipeline therapies, satisfying the unmet needs of convenient administration.”
Future Trailblazers
Biogen Idec Inc (NASDAQ:BIIB)’s position is complicated. If Tecfidera succeeds, its cornerstone products, Avonex and Tysabri, likely will lose revenue, since they are both injections. Recent quarters have already seen Tecifdera eating into Avonex’s and Tysabri’s growth. However, with strong traditional offerings and one of the leading treatments of tomorrow, Biogen Idec Inc (NASDAQ:BIIB) is positioned to benefit from the growth in the industry, no matter which treatment people choose.
Aubagio is another popular oral treatment. The treatment is owned by Sanofi SA (ADR) (NYSE:SNY), and it launched in October 2012 in the United States. Aubagio generated $26.5 million in revenue in the first quarter of 2012, a meager amount compared to the $10.64 billion produced by the company in the quarter. However, the drug is on track to produce revenue in the hundreds of millions in 2013, and has the potential to reach billions as the drug launches globally.
Gilenya, owned by Novartis AG (ADR) (NYSE:NVS), is a leading oral treatment for MS. Gilenya produced $486 million in the second quarter. The strong performance was fueled by continued strong data which supported its efficacy. Gilenya only accounted for 3% of overall revenue for the company in the quarter, however the drug has become more vital to the company over the past year, growing 66% year over year in revenue in the second quarter.
Tecfidera, Aubagio, and Gilenya all are innovative offerings in the treatment of MS, and should continue to growth exponentially. All have the potential to become blockbuster drugs, presenting incredible upside for their parent companies
The Foolish Bottom Line
Biogen Idec Inc (NASDAQ:BIIB) posted an impressive second-quarter report. However, even an upside surprise of 100% could not have overshadowed the performance of Tecfidera.
Tecfidera is not a drug-specific story; it represents the coming wave of oral treatments for multiple sclerosis. This trend will substantially grow the global MS market, and place companies such as Novartis AG (ADR) (NYSE:NVS), Biogen, and Sanofi SA (ADR) (NYSE:SNY) in a position to capitalize on explosive growth.
While this change will not happen overnight, and could span over the course of several years, countless organizations and research firms are certain it is coming. Investors should track the growing adoption of oral treatments by MS patients, as well as the deterioration of injection treatments and their revenue generation.
Biogen by far appears the most attractive as an overall investment. The company’s exposure to the MS market is massive, and it should serve the company well into the future. With premier oral and injection treatments, Biogen is likely to gain market share, and prosper into the future.
Ryan Guenette has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Ryan is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited.
The article Out With the Old, In With the New in Treating MS originally appeared on Fool.com is written by Ryan Guenette.
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