Biogen Idec fell 4% in early trading Thursday after reporting that its amyotrophic lateral sclerosis, or ALS, drug dexpramipexole flunked phase 3 trials. Dexpramipexole missed its primary endpoints of function and survival. Biogen will discontinue the drug's development.

The failure wasn't surprising given the difficulty of ALS treatment, but this will place more importance on the company's next pipeline project, a treatment for multiple sclerosis (MS).

A known risk
Sanofi 's Rilutek currently stands alone in the ALS treatment market because neurodegenerative disease is incredibly difficult to treat. ALS, also known as Lou Gehrig's disease, causes death within a few years and desperately needs a strong treatment. Such a drug could become a blockbuster -- if it ever makes it through Food and Drug Administration approval.


Dexpramipexole joins a cavalcade of failed ALS treatments over the years. Sanofi pulled its drug xaliproden from the regulatory process following lackluster phase 3 results. Johnson & Johnson tested its anti-seizure treatment Topamax for ALS but shelved the project when some patients reported serious side effects. And the list continues.

There is an upside to this failure -- it's not entirely Biogen's problem. Dexpramipexole was licensed from privately held Knopp for $20 million upfront and an offer to buy $60 million of Knopp stock. Any loss stings, but at least it wasn't Biogen's solo project that went kaput.

Moving on
Dexpramipexole's failure was the first prominent boo-boo under George Scangos, who moved into the CEO position in 2010. But the company will brush off and keep moving.

The next significant drug to watch coming down the pipes is BG-12, an oral treatment for early stage MS. The Fool's Sean Williams dubbed BG-12 a potential "life changer," citing two late-stage trials that displayed strong efficacy. The drug also had greater tolerability than the currently available oral treatments, Aubagio from Sanofi subsidiary Genentech and Gilenya from Novartis .

Biogen filed the new drug application for BG-12 last spring. But the FDA issued a three-month extension in the fall, meaning a final decision should come in March or April of this year. Market potential estimates include up to $3 billion in peak sales for the drug if it receives approval.

Foolish final thoughts
The low odds of an ALS treatment making it through to approval might have tempered the impact of dexpramipexole's failure. Keep an eye on BG-12's FDA decision for the next major catalyst.

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The article Another ALS Drug Failure for the Pile originally appeared on Fool.com.

Fool contributor Brandy Betz has no positions in the stocks mentioned above. The Motley Fool owns shares of Johnson & Johnson. Motley Fool newsletter services recommend Johnson & Johnson. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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