Biogen, at a crossroads, surges on promising Alzheimer’s drug assessment

Shares rose 40% after Wall Street learned FDA staffer gave positive review of company’s experimental medicine

Biogen Inc. received a big boost on Wednesday after U.S. Food and Drug Administration regulators appeared to give a positive assessment of the company’s experimental Alzheimer’s disease drug, sending shares up 40%.

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The biotech giant is at a crossroads as it seeks regulatory approval for its potential blockbuster Alzheimer’s drug aducanumab, while facing down generic competition to its biggest-selling treatment.


Soon the company will know whether it must confront falling sales of its multiple-sclerosis treatment Tecfidera without a parachute, or if it can bring to a market an Alzheimer’s product likely to generate billions of dollars annually in new revenue and provide years of growth.

The decision’s importance to the company drove the stock’s surge, which upped Biogen’s market capitalization by $15.4 billion. Shares were trading near $353 Wednesday afternoon, up from $247 at Tuesday’s close.

The company is scheduled to make its case Friday for approving its Alzheimer’s drug before a panel of independent advisers convened by the FDA.

An agency medical reviewer wrote in documents the FDA released ahead of the meeting that “the evidence supporting the effectiveness of aducanumab is highly persuasive.” But an FDA statistical reviewer was more critical, writing that there is conflicting evidence for the drug’s effectiveness and that approving the medicine could set back studies of other Alzheimer’s drugs because it would be harder to recruit volunteers.

The advisory panel will vote on whether Biogen’s studies prove the treatment’s effectiveness. The FDA isn’t bound by the panel’s recommendation but typically follows its advice.


If approved, the drug would be the first marketed to slow cognitive decline in patients with early Alzheimer’s, a population exceeding a million people in the U.S. Sales of aducanumab are projected to reach $7.5 billion in 2025, according to analyst estimates collected by FactSet.

The stakes for Biogen couldn’t be higher. If aducanumab is approved, the Cambridge, Mass.-based company could have one of the bestselling drugs in the world, fueling its revenue and profit growth for years to come. If it is rejected, Biogen is left primarily with a stable of aging multiple-sclerosis drugs with declining revenue.

“It’s make-or-break for the company,” said Brian Skorney, an analyst with Robert W. Baird & Co. “I can’t think of more of a defining event for a large-cap company.”

Biogen Chief Executive Michel Vounatsos said the drugmaker doesn’t depend on the Alzheimer’s treatment alone, adding that the company has 30 drugs in clinical development, eight of which are in late-stage Phase 3 testing.


“We believe our pipeline has the potential to enable a second wave of growth in the mid-2020s” driven by areas such as ophthalmology, stroke, lupus and amyotrophic lateral sclerosis,” Mr. Vounatsos said in a statement.

Biogen needs to find new products, analysts say. Since the summer, multiple generic copies of its biggest-selling drug, Tecfidera, have launched on the U.S. market and already captured nearly a quarter of prescriptions, according to analysts.

Tecfidera sales are expected to decline to 15% this year to $3.8 billion, and to decline to $806 million in 2025, according to analysts polled by FactSet.

Biogen’s most recently launched blockbuster, Spinraza, was approved in late 2016 to treat a rare genetic disorder called spinal muscular atrophy. The drug is forecast to have sales of about $2 billion this year, but competition from newer therapies is expected to limit its growth in future years, analysts say.

Before Wednesday’s surge, challenges to Biogen’s existing product lineup had contributed to a 17% slide in its shares for the year.

Now, Biogen is betting that aducanumab can juice its prospects. The drug is a monoclonal antibody derived from the immune cells of elderly people with no or unusually slow cognitive decline. Researchers designed it to clear from the brain a sticky substance called beta amyloid that is thought by many scientists to contribute to Alzheimer’s disease.


Aducanumab’s outlook appeared dire in March 2019 when Biogen halted two-late studies of the drug after determining it was statically unlikely to provide a benefit over a placebo. The news caused Biogen shares to sink by 29%, and the company shed $18 billion in market value. Some researchers said failure of aducanumab and other experimental therapies targeting beta amyloid pointed to the need to better understand the biology of Alzheimer’s and find other possible drug targets.

Yet the company stunned the investor and scientific communities several months later when it resurrected the drug. Biogen said in October 2019 that it would seek approval for the medicine after analyzing new data from the discontinued trials showing that it appeared to slow cognitive decline compared with placebo in one of the trials. The drug failed to show a benefit in the second study, but Biogen says this is likely because fewer patients received the highest dose of aducanumab.

Some critics of Biogen’s aducanumab data say the conflicting results indicate the company should run another large clinical trial to prove the drug’s benefit.

“While it is possible that [aducanumab] has cognitive benefits, the data as they exist are clearly insufficient to support a claim of efficacy,” David S. Knopman, a Mayo Clinic neurologist who served as an investigator in the Biogen trials, wrote in a recent paper in the journal Alzheimer’s & Dementia.

Some researchers who believe aducanumab is beneficial say the benefit is relatively small.

“I think it works, but its benefits are modest,” says Paul Aisen, director of the Alzheimer’s Therapeutic Research Institute at the University of Southern California. “We need treatments for Alzheimer’s disease. It’s a huge world health problem and effective, disease-slowing treatments are needed, the sooner the better.”


Another concern of some scientists is that aducanumab carries the risk of swelling and small bleeds in the brain. This side effect can be managed by monitoring patients with imaging scans and, if it is detected, reducing patients’ drug dosage or discontinuing treatment altogether, said Dr. Aisen, who is a paid consultant to Biogen.

The FDA faces a deadline of March 7, 2021, to make a decision on aducanumab. If the drug is approved, the financial impact on the U.S. health-care system could be massive.

More than five million Americans have Alzheimer’s disease, and of these 1.2 million to 1.4 million could be eligible to take aducanumab because they have mild cognitive impairment and abnormally high amyloid levels, said Steven Miller, chief clinical officer at health-insurer Cigna Corp.

It is unclear how much Biogen might charge for aducanumab, with some analysts predicting as little as $10,000 annually per patient, compared with the $50,000 to $100,000 annually charged for other monoclonal antibodies.

Biogen declined to comment on aducanumab’s pricing or the number of patients who might be eligible to take it.

Much of the costs of aducanumab would fall on Medicare’s outpatient drug program, called Part B, because the treatment is administered by doctor infusion.

“There’s going to be tremendous pressure to approve it because there is an unmet medical need that affects so many families,” said Dr. Miller. “If they approve it, you’re going to have enormous demand for the product.”