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Odds are increasing that Biogen Inc.’s experimental and somewhat controversial Alzheimer’s disease drug may get approved after Food and Drug Administration officials said there was enough evidence in clinical trials to prove the therapy’s effectiveness.
The publication of the FDA document on Wednesday in advance of an advisory committee meeting for aducanumab referred to the “substantial evidence of effectiveness to support approval,” a stamp of support that sent shares of the biotech company soaring 40%.
Biogen’s BIIB, -7.10% stock was down 7.3% on Thursday.
On Friday, starting at 10 a.m. E.T., a group of independent medical experts will virtually gather to discuss and then make a recommendation to the FDA on whether to approve aducanumab, which will be called Aduhelm if it is approved. The regulator is not required to follow the committee’s recommendation during the advisory committee meeting but often does. The FDA has until March 7 to make its final decision on whether to approve the therapy.
Brian Abrahams, an analyst for RBC Capital Markets who said he found the FDA documents to be “surprisingly supportive,” notes that the FDA has a “clear predilection for approving the agent.”
See also:Alzheimer’s expert says more clinical trials are needed for controversial Biogen drug
Much of the current investor interest in Biogen is focused on the resurrection of aducanumab and persistent hope that an FDA approval is in the cards. That said, some Wall Street analysts and medical experts remain skeptical about the drug’s effectiveness.
Back in December of last year, Baird analyst Brian Skorney told investors that “there are so many reasons we think aducanumab is getting rejected, our word count restrictions don’t allow us to put them all here.” That was around the same time that Dr. Howard Fillet called for new trials evaluating the therapy.
After reading the FDA document this week, Raymond James analyst Steven Seedhouse told investors he is still not persuaded that the drug works. “In fact, our conviction that the drug probably doesn’t work is increased,” he wrote in a note on Thursday. “We’re not sure how else to put it: FDA could approve a drug that may not work. They just did with remdesivir, so why not again?”
(Remdesivir is Gilead Sciences Inc.’s COVID-19 treatment. It received a full FDA approval last month though some experts have questioned how well the drug works.)
New research published Nov. 1 in The Journal of the Alzheimer’s Association concluded that data shared by Biogen to date has failed to demonstrate the clinical benefits of aducanumab.
Read:What millions of Americans have in common with Seth Rogen and his wife: Caregiving
There are currently no approved drugs that treat the cognitive decline associated with Alzheimer’s disease, which is what aducanumab aims to treat in patients, though there are some therapies that are used to treat some of the behavioral symptoms of the neurological disease. An aducanumab approval could mean up to $12 billion in peak sales for Biogen, according to a Goldman Sachs estimate cited this year in a pharmaceutical trade publication, and it would also mark the first pharmaceutical success for an Alzheimer’s treatment after a string of high-profile failures, such as Eli Lilly & Co.’s LLY, -1.87% solanezumab in 2016 and again earlier this year.
Biogen announced in March of last year that it had scrapped development of aducanumab after an analysis revealed the drug wouldn’t meet the primary endpoints in a pair of Phase 3 trials. The day before the announcement Biogen’s stock price was $320.59; the following day, shares tumbled to $226.88.
But then in mid-October of last year, Biogen surprised investors by announcing new plans to revive aducanumab and submit a regulatory application in the near future. Since then the stock has largely recovered, even hitting a two-year high of $355.63 on Wednesday. Mizuho Securities’ Salim Syed told investors that an aducanumab approval could push the stock to $400, though a failure would send it down to $215.
Biogen’s stock is up 19.8% so far this year, while the SPDR S&P Biotech ETF has gained 27% and the S&P 500 SPX, +2.24% has gained 6.6%.
