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Biogen Idec shares were down more than 2% following the announcement of disappointing top-line results on the company’s late stage amyotrophic lateral sclerosis (ALS) candidate, dexpramipexole.

Biogen said that dexpramipexole failed to meet the primary endpoint in a randomized, double-blind, placebo-controlled phase III study that was conducted in patients suffering from ALS. Besides failing to meet the primary endpoint, dexpramipexole also did not achieve its main secondary endpoints. Moreover, it failed to show any efficacy in sub-populations.

Given the disappointing data, Biogen has decided to scrap the development of dexpramipexole for ALS. Detailed results will be presented by the company at an upcoming medical conference. Dexpramipexole became a part of Biogen’s pipeline following the company’s licensing deal with Knopp Neurosciences.

The failure of dexpramipexole is disappointing especially as the candidate had fared well in phase II studies. However, we note that dexpramipexole was always a high risk candidate given the challenges associated with the development of a treatment for ALS.

With dexpramipexole phase III results out of the way, we expect investor focus to shift to Biogen’s phase III multiple sclerosis candidate, PEGylated interferon. Top-line results from a phase III study (ADVANCE) should be out shortly.

Another major catalyst for the company could be in the form of FDA approval for its oral multiple sclerosis candidate, BG-12, by March. We believe BG-12 could become a leader in the oral multiple sclerosis market once launched.

Biotech companies that currently look more interesting include Amgen (AMGN - Analyst Report), which carries a Zacks #1 Rank (Strong Buy).

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