By Sarah Toy
Biogen Inc. executives sought on Wednesday to ease investors’ concerns over the recent failure of one of the company’s investigational Alzheimer's drugs.
During an earnings call with analysts, head of research and development Michael Ehlers said the biotech giant (NAS:BIIB) planned to continue its pursuit of Alzheimer’s drugs, but would reduce its risk by focusing on diversifying its pipeline.
“We remain committed to our goal of developing novel therapies for Alzheimer’s disease,” he said.
Ehlers said Biogen was closely analyzing the data from the two failed Alzheimer’s trials to “inform our view” of the company’s Alzheimer’s trials with drug development partner Eisai Co. Ltd. (TKS:JP:4523) . Biogen and Eisai are working together on two amyloid-based Alzheimer’s drugs, elenbecestat and BAN2401.
In Alzheimer’s disease, a buildup of amyloid leads to the formation of tau-containing neurofibrillary tangles, killing brain cells and triggering neuroinflammation, which kills brain cells on a much larger scale.
Some investors are skeptical of drugs like elenbecestat and BAN2401 that are designed to reduce the amount of amyloid in the brain, the same principle upon which the company’s failed Alzheimer’s drug aducanumab was based.
Many think it’s time to look in another direction, and Ehlers confirmed the company was pushing forward with three tau-targeting Alzheimer's programs: BIIB092, BIIB076 and BIIB080, its collaboration with Ionis Pharmaceuticals (NAS:IONS) .
He added that the company would "continue to mitigate risk” by looking for opportunities to acquire later-stage assets. Part of that strategy includes Biogen’s acquisition of Nightstar Therapeutics, which has a promising ophthalmology pipeline.
Shares of Biogen have taken a beating over the past few weeks. The biotech giant’s stock fell nearly 30% in late March, when the company announced it was discontinuing two late-stage trials of aducanumab, which analysts had once thought could be Biogen’s next big blockbuster drug. The company has bought back $1.1 billion of stock so far this year, as part of a $5 billion buyback program announced days after the plunge.
Investors’ continued concerns about Biogen's pipeline, coupled with recent anxiety over the health-care policy environment, may have played into the stock’s 2.2% drop on Wednesday, which came even after the company reported first-quarter revenue that beat estimates and earnings that were in line with what Wall Street had expected.
Profit for the company’s latest quarter rose to $1.409 billion, or $7.15 per share, compared with $1.173 billion, or $5.54 per share, in the year-earlier period. Adjusted earnings per share was $6.98, matching the FactSet consensus. Revenue was $3.49 billion, above the FactSet consensus of $3.396 billion and higher than $3.131 billion a year ago.
Biogen’s best-selling drug, multiple sclerosis treatment Tecfidera, brought in $999 million in the first quarter, up from $987 million a year ago. The widely used spinal muscular atrophy drug Spinraza brought in $518 million, up from $364 million in the year-earlier quarter.
Although revenue from both Tecfidera and Spinraza grew, sales of Tecfidera actually missed Wall Street’s estimates, and investors have been worried about what the future holds for the two blockbuster drugs. Spinraza faces impending competition from risdiplam, an investigational spinal muscular atrophy drug being developed by Roche Holding Ltd. (OTC:RHHBY) and PTC Therapeutics Inc. (NAS:PTCT) , and Zolgensma, a gene therapy being developed by Novartis AG (NYS:NVS) subsidiary AveXis. Tecfidera is up against a substantial patent threat from Mylan NV (NAS:MYL) .
“We continue to believe we have valid patents,” said Biogen Chief Executive Michel Vounatsos. “Nonetheless, we are appropriately preparing for all possible outcomes.”
Part of that preparation is pushing patients to use Vumerity, a multiple sclerosis drug being developed by Biogen and Alkermes Plc. (NAS:ALKS) , Vounatsos said on Wednesday. The companies submitted a new drug application to the Food and Drug Administration in December, and expect a regulatory decision to be made by the fourth quarter of 2019.
“It is a priority that we appropriately maximize the potential of Vumerity,” said Vounatsos.
Shares of Biogen have fallen 25% in the year to date, while the S&P 500 (S&P:SPX) has gained 17%.