EMD Serono Staging Battle Against Multiple Sclerosis in Boston, Chief Says

6/8/09

If you don’t already count EMD Serono among the leaders in research of multiple sclerosis treatments in the Boston area, perhaps you haven’t talked to EMD chief executive Fereydoun Firouz. For EMD Serono—the U.S. affiliate of German chemical and drug powerhouse Merck KGaA and its Swiss biotech unit Merck Serono— the Boston area is home to a multi-pronged effort to develop new drugs for multiple sclerosis as well as other neurodegenerative diseases, cancer, and fertility-related conditions.

Yet there’s reason to pay extra attention to EMD’s focus on MS drug research. Merck Serono in late April revealed impressive data on a pill form of Cladribine, which could become the first oral MS drug approved in the U.S. Oral drugs for MS are a potential alternative to the current standard treatment, injections of interferon beta. German Merck (not to be mistaken for Whitehouse Station, N.J.-base drug giant Merck & Co. (NYSE:MRK)) markets an interferon beta product marketed as Rebif, which is a rival to Cambridge, MA-based Biogen Idec’s (NASDAQ:BIIB) version, Avonex. Biogen is also developing an oral MS drug, which is in late-stage clinical trials, hoping to compete with EMD in that business as well.

To understand how vital the MS drug market is to German Merck, one only has to look at the company’s balance sheet. Rebif was the company’s No. 1 pharmaceutical product last year with about $1.8 billion in sales, which accounted for about 17.5 percent of the company’s total revenue.

Firouz tells Xconomy that he’s quite aware of EMD’s Boston-area competitors in MS drug research, but he emphasizes that his company is focused on advancing research in the field more than besting rivals. Multiple sclerosis is a chronic disease in which the immune system attacks the fatty tissue that protects nerve fibers, resulting in uncontrolled movements, numbness, and paralysis. About 400,000 Americans have MS. EMD, which employs about 650 people in Massachusetts, revealed in March the opening of a lab in Cambridge to house 50 researchers focused on MS and neurodegenerative diseases. The lab happens to be in Kendall Square, the same section of town where Biogen is headquartered. Genzyme (NASDAQ:GENZ), which is developing Campath for MS, has its corporate home there too.

EMD hasn’t decided whether Kendall Square is a long-term address for the company, Firouz says. Next year, the company plans to complete an expansion of its research labs in facilities under construction north of Boston in Billerica, MA, to accommodate 100 new scientists. (The firm also has a protein drug plant in Billerica and its main research and corporate facility in Rockland, MA, south of Boston.)

We caught up with Firouz recently to discuss the firm’s MS research strategy. The following are some excerpts from that conversation:

Xconomy: How strongly does the Boston area factor into your growth plans?

Fereydoun Firouz: On the research side, we are building both oncology and neurodegenerative global research hubs here in the United States and mainly in Boston. That triggers, in fact, even more collaboration with academic institutions and medical schools in this area. All research around MS will be done in the Boston area. In fact, the majority of MS research on a global basis will also be done in Boston. This is all really about understanding the underlying pathology of MS.

X: Have you been able to lure scientists away from competitors like Biogen?

FF: As you can imagine I’m quite sensitive to this [back-and-forth] between Biogen Idec, which I’m not really part of. We’re doing the right thing in MS, we’re concentrated and focused on MS. And that would mean what? Obviously, folks who are in MS want to come and work for a leader in MS. And Cladribine is going to be potentially the first oral treatment for MS in the United States. If you put this all together, you can imagine that people are coming to us and knocking on our door and saying we want to become part of this fantastic transformation that EMD Serono is going to make available for patients. It’s quite compelling if you are in MS in the Boston area and you work for other companies. At one point you are going to be looking at EMD Serono. Having said that, we are not the only shop here running MS [programs]. With respect to the other players, we are a leader in MS and we are delivering on the milestones.

X: How well is EMD known for its MS research?

FF: We were always in neurodegenerative and endocrinology, and in neurodegenerative we were in MS. It is true that in neurodegenerative we have now executed our plan. We did announce a couple of years ago that our standing in MS is very strong and our commitment to MS is very strong. So this [recent news about Cladribine] has been the fulfillment of our plans over the past five years.

X: Are people starting to get the message?

FF: Some people are saying “Who are those folks who are really committed and behind MS research?” I think it’s pretty clear. If you look at our external activities, our internal activities, our job creation, our research around MS in Boston and in the United States, it is pretty clear or one could conclude logically that EMD Serono is the major player in the MS field today and tomorrow.

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