Biogen Idec’s ( BIIB - Analyst Report ) shares were down 2.74% after the company announced that the US Food and Drug Administration (FDA) has extended its review period for the company’s oral multiple sclerosis (MS) candidate, BG-12 (dimethyl fumarate), by three months.

The FDA said that it needs extra time to review the company’s New Drug Application (NDA) for BG-12. Biogen had submitted the NDA in March. The NDA was based on data from the phase III DEFINE and CONFIRM studies which showed that treatment with BG-12 led to a significant reduction in disease activity in multiple sclerosis patients. Moreover, the candidate had a favorable safety and tolerability profile.

The extension of the FDA’s review period means that a response regarding BG-12’s approvability should be out in March-April 2013 instead of later this year. Importantly, the FDA did not ask for additional studies.

Biogen is the market leader in therapies for the treatment of MS. The company’s key products include Avonex and Tysabri. Biogen has been working on strengthening its position in the MS market. We believe BG-12 could become a leader in the oral MS market once launched. Biogen is also studying BG-12 as a combination therapy.

Meanwhile, Biogen and partner Abbott Labs ( ABT - Analyst Report ) moved another MS candidate, daclizumab, into a two-year phase III study (DECIDE) in July 2010, with results due in 2014. Daclizumab is being evaluated as a once-monthly or bi-weekly subcutaneous injection for relapsing-remitting MS. PEGylated interferon rounds up Biogen's late-stage MS pipeline. PEGylated interferon is currently in a phase III study (ADVANCE). Top-line results should be out in the first half of 2013.

We currently have a Neutral recommendation on Biogen, which carries a Zacks #3 Rank (short-term ‘Hold’ rating). Biogen has an important pipeline event coming up later this year with the company slated to report phase III results on rFVIIIFc (hemophilia A) from the A-LONG study.