NEW YORK (AP) -- Shares of Biogen Idec Inc. continued to slump Friday after the company said the Food and Drug Administration has delayed a decision on its multiple sclerosis pill BG-12.
THE SPARK: On Thursday, Biogen said the FDA had extended its review of BG-12 by three months, which means the agency will make a ruling on the drug at the end of March 2013 instead of by the end of 2012. The Weston, Mass., company said the agency needed additional time to review the data it had submitted and was not asking Biogen to run additional clinical studies of BG-12.
Friday was also a down day in the broader markets, as the Standard & Poor's 500 index fell 1.7 percent in afternoon trading.
THE BIG PICTURE: Biogen filed for marketing approval of BG-12 early this year, and analysts think the drug will eventually bring the company billions of dollars in annual sales because it could become a leading option in treating multiple sclerosis. In clinical trials, Biogen said patients who took BG-12 were far less likely to have a relapse in symptoms than patients who took a placebo. The drug also worked better than Copaxone, an injection that is the current leading treatment for multiple sclerosis.
THE ANALYSIS: Barclays Capital analyst Erica Chase said the extension is not particularly surprised because Biogen conducted very large studies of BG-12: Its two late-stage trials involved about 2,600 patients combined. Chase said she still expects BG-12 to be approved and believes early demand for the drug will be strong.
She maintained an "Overweight" rating on Biogen's stock with a price target of $150.
SHARE ACTION: The stock fell $4.55, or 3 percent, to $145.01 in Friday afternoon trading. The shares lost 2.7 percent of their value Thursday. Biogen shares have nearly doubled in value since April 2011, when the company reported strong mid-stage trial results for BG-12.