Biogen shares skyrocketed on Wednesday after its experimental treatment was successful in final-stage testing — bringing along other Alzheimer’s stocks.
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Urgent need for results Biogen (BIIB), has long been working to target neurological disorders. In a Phase 3 study, a drug called lecanemab removed plaque buildup in the brain called beta amyloid. Importantly, this also brings cognitive benefits to patients with early Alzheimer’s disease.
“We believe this should support a high likelihood of full approval, (Centers for Medicare and Medicaid Services) reimbursement and $8 billion in global end-user sales and should turn Biogen into profitability again starting in 2024. Growth story,” RBC Capital Markets analyst Brian Abrahams said in a note to clients.
In response, Biogen stock surged 35.3% in early trade today, near 267.50.of shares Eisai Biogen Partners (ESALY) surged 60.7% to near 63 points.
The news helped boost Eli Lilly (LLY) surged 8% near 335.80. Roche (RHHBY) shares also rose 5.3% near 41.10. The companies are also testing Alzheimer’s drugs that reduce beta-amyloid levels in the brain.of shares Platina Another amyloid player (PRTA) surged 76.2% near 54.50.
Biogen Stock: Confirmed Cognitive Benefits
In a final phase of testing, lecanemab not only cleared beta-amyloid plaques — a hallmark of the disease — from the brains of Alzheimer’s patients, but also improved cognitive ability across the board, Biogen said in a news release. A statistically significant benefit was produced.
It was the latter point that propelled Biogen stock into the sky. The company has shown that its drug can reduce amyloid. Biogen received accelerated approval for a similar drug, Aduhelm, last year. However, the cognitive benefit of one successful and one failed Phase 3 test is questionable.
For lecanemab, the results were “pretty clean,” Mizuho Securities analyst Salim Syed said in a note. At 18 months, patients receiving lecanemab experienced a 27% slower rate of cognitive decline compared with placebo recipients. This is measured by a scale called the Clinical Dementia Rating Scale.
Other cognitive measures also showed positive results.
Also key to Biogen stock, only 21.3% of patients receiving lecanemab experienced brain swelling known as amyloid-related imaging abnormalities, or ARIA. ARIA is a common side effect of amyloid-targeting drugs such as lecanemab and Aduhelm. In the placebo group, 9.3% of patients had ARIA.
Reinvigorating the Alzheimer’s space
SVB Securities analyst Marc Goodman said the results should have clinical implications for patients.
“We expect these positive results to reinvigorate the Alzheimer’s disease field and increase investor focus on these two recent anti-amyloid beta (drugs),” he said in a note. In that group, he counted Roche’s gantenerumab in the fourth quarter and Eli Lilly’s donanemab in the first half of 2023.
He has an Outperform rating on Biogen stock.
Biogen’s partner Eisai said it plans to file for approval in the U.S. by March.
Not every analyst is a believer, however. Needham’s Ami Fadia said the result was not the “slam dunk” needed to ensure Medicare authorities agreed to pay for lecanemab treatment. This is the step that tripped Aduhelm.
“We think it’s too early to assert that lecanemab will be a multi-billion dollar opportunity, but the odds are definitely higher now,” she said in a note. She has a buy rating and a 250 price target on Biogen stock.
Follow Allison Gatlin on Twitter @IBD_AGatlin.
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