HM717-Drugs, Diagnostics and Devices-Strategy and Execution

Mark Beaumont MD

January 12, 2022

 

 

 

 

Antegren Case Write Up

10/7/2020 

Case summary

In February 2004 Jim Mullen, the CEO of Biogen Idec, encountered difficult choices regarding Antegren, a promising drug for MS that was headed for early acceptance by the FDA. He just announced an intention to submit the BLA for Antegren within the next 90 days. This decision was atypical because his submission is based on only 1 years’ worth of clinical data for a PhIII trial. Normally the FDA prefers 2 years of data to ensure patient safety and drug efficacy. The monumental choices made by Mullen were influenced by financial incentives activated by the drive for early drug acceptance and an estimation of $35 to $90M in additional Antegren sales for 2005 alone and overall revenues of $2B. These choices jeopardized patient safety and the company reputation while Mullen prioritized the importance of profit generation for investors and stakeholders highlighting the often competing interests of both parties. 

In June 2003 Biogen announced a merger with Idec and became the third largest biotechnology company in the world valued at $6.4B. The deal was considered a merger of “equals” creating a company to match larger companies with Biogens’ immunology franchise being married to Idecs strong oncology position. The combined size of the company made it attractive to smaller biotechnology companies looking for partners. 

Antegren was labeled a “beacon of hope” to the MS community. It was marketed as a promising option to treat MS, a chronic autoimmune disease that affects the nervous system and causes significant morbidity. It was the first new class of drugs called selective adhesion molecule inhibitors, designed to inhibit immune cells from leaving the bloodstream and attacking inflamed tissues. The drug was combined with Avonex, an interferon beta drug, and successfully moved from PhI to PhIII trials demonstrating safety and efficacy. Within 1 year of the PhIII trials, the drug successfully reduced relapse rates by 66% vs. placebo while alternative MS drugs only reduced relapse rates by 30%.  In February 2004 interim data for Antegren was reviewed by neurologists and company executives and a decision was made to apply for early FDA approval.

Mullen faced economic, legal, and ethical obligations to multiple constituencies and displayed how to lead in the face of challenges. Applying for early FDA approval implied that the financial benefits of the drug outweighed the risks of completing the clinical trial. The safety analysis must have been compelling enough to ease any safety concerns and proceed with production commercialization, marketing, and sale of the product. 

Biogen did not have the operational capacity to meet the anticipated demand for the drug. To solve this, options included expansion of the manufacturing and distribution capabilities at the Research Triangle Park and Oceanside facilities and finishing construction at Hillerod, all costly options requiring FDA approval. Mullen also wanted to keep the operations in-house to create a competitive advantage. This required an investment of capital likely contributing to a cash flow negative scenario for Biogen considering other expenses related to education, product launch and establishment of patient reimbursement. Also, Antegren was administered once every 4 weeks so Biogen would have to implement teams to ensure the functionality of the approximate 1,000 infusion centers. Biogen would also have to ramp up salesforce to market the product and conduct meetings with managers and payors to discuss dosing and reimbursement of the $22,000/patient/year cost.

Mullen prioritized the FDA relationship which was necessary to help Biogen obtain drug approval and importantly provide credibility to providers and insurers. The FDA rejected the orphan drug application for the MS drug Rebif in 1999 on grounds that Avanox was protected by the ODA and was serving the same segment of MS patients that Rebif hoped to help but Antegren was granted orphan drug status previously. This decision by the FDA was puzzling while raising questions about the leadership and motivations of the FDA.

Unfortunately, Mullen & Biogen Idec failed to consider the economic, legal, and ethical considerations with Antegren, now Tysabri. If it was as effective as the results showed, Biogen would want all MS patients on the drug but this would require ending the clinical trial early and even though they wanted to submit the application for approval, they did not want to release efficacy results because this would also end the trial early. This would prevent the collection of complete efficacy and safety data which would be necessary to convince providers and insurers therefore the trial was continued. Ending the trial early would also lead to requests from patients and providers to know if they were on the drug or on placebo, in which case they were likely to request a switch, a clear ethical dilemma. An incomplete PhIII trial also shortened the time to discover all potential adverse reactions namely the fatal brain infection PML, which occurred in two cases. Whatever early revenue that Biogen would obtain, which would be offset by upfront costs, would not outweigh this patient safety, ethical and financial risks.

Recommendations for action

Immediately Mullens is faced with decisions to make in response to the patients in the clinical trial on Tysabri diagnosed with PML. He has to speak with members of his leadership team to get the facts of what happened. He also needs to discover what the risks are to patients, investors, and the company, who is at risk, and how to mitigate them. He also needs to discuss these details with PML experts and outside law firms to protect himself and the company.  Patients, providers, and trial sites all need to be notified immediately. He will need to notify the FDA of the adverse events and close the trading window of stocks for the senior executives. He will also need to make a public statement of the adverse events of Tysabri, being fully transparent of the patient risks. The main priority for Mullen is patient safety.

One of the biggest decisions includes whether or not to withdraw Tysabri from the market and it should be. It is clear that the drug poses an uncertain safety risk to patients which is now emergent considering the two cases of PML. The ethical and financial implications of having patients continue Tysabri include additional harm to patients and creating a risk for litigation so in consultation with the FDA and lawyers, those on the drug need to be notified immediately to discontinue taking it until further safety data is obtained. 

Ongoing analysis of patient records would continue uncovering any additional cases of PML and discussions with providers and patients would address concerns regarding MS treatment plans with Tysabri or other medications. Discussions with financial leaders are needed to address layoffs, a reduction in expenses, a company reorganization, and financial losses as stock prices would fall but they are measures that will help the company. Mullen must also anticipate an SEC investigation because of the drastic changes in stock prices and concerns of insider trading by senior executives after the news of PML related adverse events had been received. The company should continue to market Avonex and Rituxan, two drugs that have historically been profitable. 

Mullen should also give regular updates to the EMEA, Data Safety Monitoring Committees, and Biogen Idec’s Board of Directors of the status of these changes while articulating an expansion of the organization’s core values and strategically aligning them with their business strategy. Collaborative efforts with the FDA and NIH would be recommended along with convening conferences with experts to discuss Antegren, review patient records, and discuss strategies for patients who were on the drug. Encouraging the completion of the PhIII trials is important as it provides comprehensive information of the safety profile for the drug while implementing a thorough follow-up plan of all patients, providers, and treatment sites tracking them for health outcomes and any further cases of PML. These are all decisions that maximize stakeholder value, the MS community, and clinical trial patients.

Exhibits

Event Date Share price (closing)
A Biogen announces merger with Idec 6/1/2003 $33.96
B Biogen Idec announces intent to submit Antegren’s application to the FDA 2/18/2004 $53.23
C Biologics License Application for Antegren formally submitted 5/25/2004 $63.54
D FDA approves Tysabri 11/23/2004 $57.43
E Biogen Idec withdraws Tysabri from the market 2/25/2005 $38.65

Key dates

-Antegren PhII trials begin September 2001

-Biogen Idec neurologists review 1 year trial data of PhIII trials December 2003

-Submitted complete analysis to FDA January 2004

-Research team shared 1 year results with executives early February 2004

-Biogen announced intent to submit BLA application to FDA for approval February 18, 2004

-Biogen formally submitted BLA application; received priority review May 25, 2004

-Antegren name changed to Tysabri November 23, 2004 

-Approximately 7000 patients on therapy February 2005

-News of PML cases February 18, 2005

-Tysabri withdrawn from market February 25, 2005

-Tysabri suspended February 28, 2005

-Results of 2 year PhIII trial announced July 18, 2005