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Investor Alert

Dec. 5, 2019, 2:20 p.m. EST

Biogen stock climbs as investors shrug off analyst skepticism about Alzheimer’s drug

New Biogen data on Alzheimer’s therapy is panned by analysts. The stock promptly falls—then recovers

By Jaimy Lee


Bloomberg News/Landov

Shares of Biogen were up 4.5% in afternoon trading in response to new data that indicates its recently resurrected experimental Alzheimer’s disease treatment can reduce cognitive decline.

Analysts, however, were not convinced and social media was filled with barbed comments during the presentation, sending the stock down about 3% as it resumed trading after a halt.

At least one analyst discounted the highly anticipated data. Mizuho’s Salim Syed said it’s not “that impressive” and “old questions remain.”

Biogen (NAS:BIIB)  and Japanese drugmaker Eisai (TKS:JP:4523)  had been testing aducanumab in patients with Alzheimer’s who had mild cognitive impairment and dementia, based on the idea that cognitive decline can be slowed by targeting beta amyloid.

Read: Wall Street is ditching amyloid-based Alzheimer’s drugs — it shouldn’t, scientists say

Biogen’s surprise—and somewhat controversial—decision in October to resuscitate aducanumab has been met with analyst skepticism even as its stock price has made a notable recovery since then. The biotech had discontinued a pair of Phase 3 trials in March after a futility analysis of a smaller set of data from the trials indicated that the primary endpoints wouldn’t be met. (The smaller dataset had 803 and 945 patients, compared with the 1,638 patients and 1,647 patients included in the larger dataset released Thursday.)

Biogen’s stock tumbled to a three-year low that week, hitting $216.71 on March 22. It’s now hovering just around $296 after swinging upward on the Oct. 22 news.

In new data released Thursday, at the Clinical Trials on Alzheimer’s disease meeting in San Diego, a Biogen executive said that patients in one of the Phase 3 trials, called Emerge, who received a high dose of the therapy showed a reduction in clinical decline, meeting the trial’s first and secondary endpoints. Patients in the second trial, called Engage, did not report a reduction in clinical decline.

This data will be used in the company’s application to the Food and Drug Administration, according to comments made by Samantha Budd Haeberlein, Biogen’s head of late-stage clinical development for Alzheimer’s disease, dementia and movement disorders, during the presentation.

Biogen previously disclosed that it had consulted with the Food and Drug Administration on the data. However, analysts have largely challenged Biogen’s decision to rework old data and use it to pursue FDA approval.

Read: Americans don’t understand the dementia risk they face

Earlier this week Jefferies analyst Michael Yee said a 2020 FDA approval of aducanumab could come as the result of political pressure on regulators. Baird’s Brian Skorney had an even harsher take. “The cumulative data for aducanumab falls really far short of this standard to anyone but the most ardent Goop subscribers,” he wrote. (Goop, Gwyneth Patrow’s media company, is often criticized for writing about health trends that is lacking in scientific rigor.)

At the same time, Bernstein’s Ronny Gal questioned whether Biogen would risk its credibility with questionable data. “We reject the notion that Biogen resurrected aducanumab for non-scientific reasons and are encouraged by the FDA finding submission ‘reasonable’ and especially in allowing Biogen to re-dose patients with the high side-effect drug,” he wrote.

Wall Street’s emotional response to Biogen’s decision reflects a larger frustration at the lack of new therapies for a fatal, costly disease that is currently diagnosed in about 6 million Americans.

When Eli Lilly’s (NYS:LLY)  solanezumab failed a Phase 3 trial in 2016, just days before Thanksgiving, then CEO John Lechleiter shared a video filmed in the former home of the psychiatrist who discovered Alzheimer’s thanking the patients who participated in the trial — a rare move for the head of major pharmaceutical company at that time.

See also: This is where most people with dementia live

Biogen itself is bullish on the probability of an approval.

The company is hiring for at least a dozen jobs that traditionally work on FDA-approved drugs, including regional medical science liaisons focused on Alzheimer’s disease and a senior director for global value and access for Alzheimer’s. The payer marketing role “is accountable for planning and executing the launch of the first-to-market Alzheimer’s disease modifying therapy,” according to a job ad.

“I believe the drug works,” Al Sandrock, Biogen’s head of research and development, told the audience at a STAT Summit two weeks ago.

Biogen executives are expected to further discuss the data on a webcast on Thursday evening.

Biogen stock is flat this year, while the S&P 500 (S&P:SPX)  is up about 24%.

Link to MarketWatch's Slice.