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Core trust holding Biogen hit by withdrawal of MS drug

Core trust holding Biogen hit by withdrawal of MS drug

Core trust holding Biogen is seeing its stock come under further pressure as a result of a decision, announced today with its partner Abbvie, to withdraw for safety reasons the recently-launched multiple sclerosis (MS) treatment Zinbryta. The drug was launched in 2016 for third-line use in MS with a black box warning for liver toxicity and, although sales to date have been modest, these were nevertheless previously expected to peak at c$500m in the mid 2020s.

Ironically, the immediate effect of the decision has been muted by virtue of Biogen, as a major player in MS, being the unexpected beneficiary of a major delay to Celgene’s contender in this marker, ozanimod. Earlier this week, Celgene revealed it had received a refusal-to file letter from the FDA after submitting its regulatory application for ozanimod, something which is highly unusual. Biogen has four other approved MS products: Tecfidera, Tysabri, Avonex and Plegridy, which sell in aggregate ~$8bn/year and sales of these products had been expected to come under pressure from ozanimod together with other competitive changes in the market.

Biogen’s stock has fallen by around 9% this year, largely as a result of growing concern over prospects for its Phase III aducanumab programme for Alzheimer’s Disease, following a decision to add extra patients to pivotal trials. Biogen remains the leading player in the development of products for Alzheimer’s.

A number of the pure biotech sector specialist trusts hold substantial holdings in the company. Biotech Growth Trust (BIOG) has the largest over-weight position, with a shareholding accounting for 13.2% of its NAV. Biogen is also a top holding for two US closed end funds, Tekla Life Science (HQL) (8.2%) and Tekla Healthcare Investors (HQH) (8.2%). At 6.5% of its NAV, International Biotech Trust (IBT) has an modest underweight position, given Biogen has a 7.7% weighting in the Nasdaq Biotech Index.

Core trust holding Biogen hit by withdrawal of MS drug

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