The FDA called the latest results of the test for Biogen’s Alzheimer’s drug Aducanumab as “highly persuasive” and suggested that it is likely to approve the drug by the coming Friday.
On Wednesday, November 4, Biogen Inc (NASDAQ: BIIB) stock rallied a straight-up 43.97% after the Food and Drug Association said that they have enough data leading to a possible approval of the Alzheimer’s drug. The FDA agreed on seeing results from Biogen’s late-stage trial, study 302, calling them “highly persuasive”.
Analysts said that Biogen can soon receive an approval nod for its Alzheimers drug Aducanumab. However, there has been some controversy around this drug as it failed in the Phase 3 test dubbed Engage. But later, the same drug showed good results in another test called Emerge. In a published document reviewing the drug, the FDA said:
“The study is capable of providing the primary contribution to a demonstration of substantial evidence of effectiveness of aducanumab. Based on the considerations above, the applicant has provided substantial evidence of effectiveness to support approval”.
The FDA also noted that the drug has an “acceptable safety profile”. Biogen’s Aducanumab drug targets a “sticky” compound called beta-amyloid. An external panel is likely to meet on Friday to suggest the drug-approval to the FDA.
As per Biogen’s estimates, around 1.5 million people in the U.S. having early Alzheimers could be potential candidates for this drug. Biogen has been working on this drug for a long time. In March 2019, a group of independent analysts said that the drug is unlikely to work. After this, Biogen had to discontinue its work on Aducanumab. However, in October 2019, made a comeback announcing that it was seeking regulatory approval.
Biogen (BIIB) Stock Hits 9-Month High
With the latest statement from the FDA, BIIB stock shot 43.97% north on Wednesday. On Wednesday closing, Biogen (NASDAQ: BIIB) stock was trading at $355.63 with the company’s market cap shooting above $50 billion. It was for the first time that the BIIB stock crossed $350 levels in 2020.
Several advisors have also upgraded their rating for the BIIB stock. After the FDA filing on Wednesday, Wells Fargo Securities analyst Jim Birchenough said:
“While predicting any FDA panel outcome is difficult, we believe that risk-reward is favorable and view positive recommendation as more likely than a negative vote.”
Truist analyst Robyn Karnauskas has also maintained a buy rating for the stock. In a report to clients, she wrote:
“While we continue to review the FDA briefing documents, based on the questions (posed to the advisory committee), the FDA is giving Biogen the option for approval based on (effectiveness) data from one trial”.
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