Serono Rebif Interferon Beta-1a Treatment U.S. Launch Expected Mid-2002

Serono expects to launch its interferon beta-1a treatment Rebif in the U.S. by mid-2002 after receiving the results from a head-to-head study comparing the multiple sclerosis biologic with Biogen's Avonex.

"As soon as we have [the] results, we'll file immediately," VP-Corporate Marketing/Neurology Samir Shah, MD, told analysts during a quarterly conference call Jan. 23. Enrollment in the study is complete and data are expected in the third quarter.

"In terms of going forward from that, the earliest time at which it will actually be on the U.S. market will be towards mid-2002," the exec predicted.

Rebif's introduction has been delayed pending expiration of the orphan drug exclusivity period for Avonex and Berlex' Betaseron (interferon beta-1b). Avonex' (interferon beta-1a) exclusivity runs out in May 2003, while Betaseron's expired in 2000 (¹ (Also see "Ares-Serono Initiates Rebif v. Avonex Trial, May Beat Exclusivity Clock" - Pink Sheet, 11 Oct, 1999.)).

Serono is counting on the premise that positive results from the head-to-head study could speed up the marketing approval of Rebif.

"We are very excited about the prospect of Rebif in MS," CEO Ernesto Bertarelli said. "It has already outperformed its competitor in Europe and a positive result in the head-to-head study later this year could lead to an early introduction...in the U.S. market."

As Serono's second-largest product, Rebif sales almost doubled to $254.2 mil. in 2000 in local currency. Rebif has surpassed Avonex in the number of prescriptions outside the U.S. and holds a 31% patient market share, according to the company.

By the close of the fourth quarter, 28,000 patients had been treated with Rebif outside the U.S., compared to 16,300 at the end of 1999. Serono added 3,500 new Rebif patients in the fourth quarter.

Serono has applied to the European Medicines Evaluation Agency for a Rebif label change as a high-dose IFN-beta treatment for first-line MS therapy. The company presented data from the four-year PRISMS study supporting the indication at the American Academy of Neurology's May 2000 meeting.

Serono is also analysing Phase II data in hepatitis C; an update is expected in the second quarter. In addition, the company is in negotiations with FDA regarding Rebif's secondary progressive MS indication, Shah reported.

Serostim (somatropin), Serono's AIDS wasting drug, generated sales of $137 mil. in 2000, virtually unchanged from the prior year, as expected.

The flat sales are attributed to "a tightening of [state Medicaid] reimbursement conditions in some areas of the U.S. in the second half of last year," CFO Jacques Theurillat noted.

"Reimbursers are adhering strictly to the AIDS wasting indications and are tightening their control on off-label use," Theurillat stated. "Based on monthly sales figures, we think that we have seen this problem bottoming out in the fourth quarter of 2000."

Theurillat predicts a 5% to 10% sales increase for Serostim in 2001 and is "cautiously optimistic about reestablishing growth."

Serono has been discussing Serostim reimbursement with individual U.S. state governments since becoming aware of the issue in August 2000. "We addressed the reimbursement issues and we've solved many of the questions that the reimbursers...had," the firm said.

With the "pick-up in strong sales of Serostim" in December and January, Serono is "cautiously optimistic that the short four-month downturn of the business is over with and we are going to be able to recover growth in the Serostim franchise," Serono said.

"The underlying business is strong and I am confident of its growth...going forward," Bertarelli maintained. "The underlying demand for the product is still increasing despite ever-changing market conditions in the AIDS business," the exec added.

Serono is investigating 20 instances of counterfeit Serostim reported since November. Incidence of the fake product has been reported by 10 to 12 patients (² (Also see "Serono Serostim" - Pink Sheet, 29 Jan, 2001.)). Details of how to distinguish the counterfeit drug have been sent to pharmacists, doctors and patient groups.