J.P. Morgan Reiterates Neutral Rating On BIIB

J.P. Morgan is reiterating its Neutral rating on Biogen Idec Inc. BIIB based upon the first of two phase three trials of laquinimod done by Teva Pharmaceutical Industries TEVA in MS patients. According to J.P. Morgan, “The data showed that laquinimod demonstrated a statistically significant reduction in annualized relapse rate (23%, p = 0.0024). The study also met additional endpoints of reduction in disability progression (36%, p =0.0122). The data looks solid, although modestly inferior to Novartis's Gilenya. There should be more clarity around the AE profile at the AAN meeting this week. Data from the second phase 3 study is expected in 3Q11 with a filing expected in early 2012. Although Biogen now has positive BG-12 data in hand (including an EDSS benefit), the oral MS market is getting increasingly crowded. In this scenario, Biogen has more to lose, especially if BG-12 is undifferentiated relative to laquinimod and Gilenya or if there is pressure on first-line ABCRs from orals. In our view, laquinimod and Gilenya are more of a threat to delaying new starts for Tysabri, even with some stabilization from the JCV assay. Reiterate Neutral.” BIIB and TEVA closed yesterday at $78.55 and $48.98, respectively.