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5 Drug Stocks in Focus on World MS Day

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Since 2009, World MS Day is officially marked on the last Wednesday of May with events and campaigns focused on bringing the worldwide multiple sclerosis (MS) community together and raising awareness about the disease.

Life with MS

This World MS Day the theme is ‘Life with MS’. About 2.3 million people across the world suffer from MS, one of the most common neurological disorders and causes of disability in young adults, while hundreds of thousands remain undiagnosed. According to the Multiple Sclerosis Foundation, more than 400,000 people in the U.S. have MS with approximately 200 new cases being diagnosed each week.

There are different types of MS including primary progressive MS (PPMS), relapsing MS (RMS), the most common form of the disease, and secondary progressive MS (SPMS).

The multiple sclerosis market represents huge commercial potential. According to information provided by GlobalData, the MS market is slated to grow from $17.2 billion in 2014 to about $20 billion by 2024. While there is no cure for the disease, several treatments are available to manage the disease. Competition in the MS market is intense given the presence of injectable treatments as well as oral disease-modifying therapies. Moreover, several companies are working on bringing new treatments to market with different mechanisms of action which are easy to administer or require less frequent dosing.

Here is a look at some of the key players in the MS market.

Biogen Inc. (BIIB - Free Report) : Cambridge, MA-based Biogen is, perhaps, the most well-known name in the MS space. The company’s marketed portfolio includes six MS drugs including oral treatment, Tecfidera. Although Biogen has had its share of challenges with progressive multifocal leukoencephalopathy (PML) being associated with Tysabri as well as Tecfidera, the company’s MS franchise brought in sales of $8.8 billion in 2016 and accounts for a major part of total revenues. Biogen is a Zacks Rank #3 (Hold) stock. Biogen’s shares have declined 13.1% year-to-date (YTD), lagging the Zacks-categorized Medical-Biomedical/Genetics industry which is down 0.3% so far in 2017.

Teva Pharmaceutical Industries Limited (TEVA - Free Report) : Israel-based Teva is also a key player in the MS market. Although well known for its strong position in the generics market, Teva’s MS product Copaxone is a key contributor to the company’s branded product revenues. The drug generated $4.2 billion in revenues last year though sales would take a hit if generic versions of the 40 mg dose enter the market. Moreover, competition in the MS market has intensified significantly. Meanwhile, Teva’s attempts to develop laquinimod have also not met with much success with the experimental MS treatment failing in a study in patients with relapsing-remitting multiple sclerosis (RRMS). Laquinimod is currently in a study for PPMS.

YTD, Teva has lagged the Zacks-categorized Medical-Generic Drugs industry with shares declining 23.3% compared to the industry decline of 7.9%.

Novartis AG (NVS - Free Report) : Swiss pharma giant, Novartis, also has a strong presence in the MS market with drugs like Extavia and Gilenya in its portfolio. Gilenya was the first oral therapy to gain approval for RMS and the first in a new class of compounds called S1P receptor modulators. Gilenya contributed $3.1 billion to the top-line in 2016. Meanwhile, Sandoz, Novartis’ generic arm, markets Glatopa, a generic version of Teva’s Copaxone 20 mg.

Novartis currently has two late-stage MS candidates in its branded product pipeline -- OMB157, an anti-CD20 monoclonal antibody for RMS with pivotal data readout expected in 2019, and BAF312, an oral, second-generation S1P receptor, with regulatory filing in the U.S. for RMS slated for the first half of 2018. Both candidates represent blockbuster potential. Novartis is also working on expanding Gilenya’s label.

YTD, Novartis has outperformed the Zacks categorized Large Cap Pharmaceuticals industry with shares gaining 10.6% compared to the industry gain of 9.1%.

Sanofi (SNY - Free Report) : Another player in the MS market is French pharma giant Sanofi which has two MS products in its portfolio -- Aubagio and Lemtrada. The MS franchise delivered sales of €1.7 billion in 2016 and Sanofi is working on life cycle management plans for the products. The company’s MS pipeline has an early-stage RMS candidate, GZ402668 (GLD52, anti-CD52 mAb, RMS, phase I). Sanofi has also performed better than the Zacks categorized Large Cap Pharmaceuticals industry with shares soaring 21.3% YTD.

Roche Holding AG (RHHBY - Free Report) : Swiss firm, Roche’s Ocrevus is a recent entrant in the MS market. Ocrevus, which has blockbuster potential, is the first and only FDA approved medicine for both relapsing and primary progressive forms of MS. However, with an Ocrevus patient being diagnosed with PML, the drug’s sales potential could be impacted if the potentially deadly brain infection is directly associated with the drug. According to a Reuters article, the company is currently investigating the case which could be associated with the use of Tysabri prior to Ocrevus. Roche has also outperformed the Zacks categorized Large Cap Pharmaceuticals industry with shares soaring 19.7% YTD.

Biogen, Teva, Novartis and Roche are all Zacks Rank #3 stocks while Sanofi is a Zacks Rank #2 (Buy) stock -- you can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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