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Biogen Idec's (NASDAQ:BIIB) multiple sclerosis drug Avonex accounted for $2.2 billion, or about 70% of the big biotech company's product revenue, through the first nine months of this year. So it stands to reason that the company wants to preserve those sales as best it can in the face of new competition.

On Thursday, Biogen said a study showed that an experimental drug -- essentially a long-acting version of its Avonex injectable treatment -- met goals for showing effectiveness in patients at both two-week and four-week dosings. Avonex is a once-weekly treatment. Biogen is testing the new drug, known as peginterferon beta-1a, as a secondary treatment in a trial of more than 1,500 patients.

"Biogen Idec has the deepest MS pipeline in the industry and we remain steadfast in our commitment to study compounds that target a broad range of patients' needs," Biogen MS researcher Gilmore O'Neill says in a statement.

The experimental drug reduced the rate of relapse in patients dosed every two weeks by about 36%. For those dosed once a month, the rate of relapse shrank 28%. The company provided little detail about safety, saying only the risk-benefit profile "appears to be favorable."

Armed with the study results, Biogen plans to seek US and European approval of the drug this year.

"Our early opinion is that the once per month should be approvable based on these data but that many patients (and) physicians will still opt for the twice-monthly given the probably better efficacy," ISI Group analyst Mark Schoenebaum says in an email. "Even a twice per month Avonex is a major convenience advance, with once a month being the home run in terms of convenience."

The most common side effects of Avonex and other interferon-based therapies are flu-like symptoms. So, in addition to convenience, fewer dosings may help MS patients better tolerate their medicine. Schoenebaum notes that more data on both effectiveness and safety will be closely scrutinized once Biogen presents study results at an upcoming medical conference. The company says it will present data at the annual meeting of the American Academy of Neurology in San Diego in March.

If approved, the drug "should help the company retain share in a class of drug (interferons) that will surely contract meaningfully over the next decade," Schoenebaum says.

Stifel Nicolaus analyst Joel Sendek predicts the new Biogen drug will be on the market next year and can generate $1.6 billion in sales by 2016. He estimates Avonex sales will drop from about $2.9 billion in 2012 to just under $700 million in 2016. (Full-year 2012 Avonex sales are not yet available. Biogen plans to report its fourth-quarter results Monday before US markets open.)

Biogen is trying to preserve its Avonex sales even as it has big ambitions for an MS pill that the company hopes to launch in the coming months. Biogen expects a ruling by late March from the US Food and Drug Administration on the approval of BG-12, a pill that would compete with Novartis' (NYSE:NVS) Gilenya. Teva Pharmaceutical Industry (NYSE:TEVA), the big Israeli drug maker that sells the injected MS drug Copaxone, is trying to block -- or at least slow -- the approval of Biogen's BG-12. (See: Teva Aims to Derail Approval of Biogen Idec's MS Pill.)

Shares of Biogen rose 1% to $145.63 in midday trading Thursday. The stock is up 24% over the past 12 months.

This article by Brett Chase was previously published on Minyanville.

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Disclaimer: The views represented on this blog are those of the individual authors only, and do not necessarily represent the views of Schaeffer's Investment Research.

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