(Bloomberg) --
Biogen Inc.’s experimental Alzheimer’s disease therapy failed to gain support from a panel of U.S. Food and Drug Administration advisers on Friday, putting the drug at a crossroads as the agency weighs approval.
The outside experts voted 8 to 1, with 2 undecided, that data from a single clinical trial with positive results was insufficient to show Biogen’s drug works. They also voted 10 to 0, with 1 undecided, that the positive study shouldn’t be considered primary proof the drug works in light of conflicting evidence from a different trial.
The votes contradict a report FDA reviewers prepared ahead of the meeting that supported the efficacy of the drug, called aducanumab, though there was dissent in the agency. The FDA will continue the review process with a decision by March 7, 2021.
Advisers said the trial they were asked to assess wasn’t finished and even though the data appeared positive, they couldn’t know for sure.
“There’s a huge danger in approving something that is not effective,” said Joel Perlmutter, a panel member and neurology professor at Washington University School of Medicine in St. Louis, Missouri.
Approval of Biogen’s therapy would be a milestone for the long battle against Alzheimer’s, a harrowing brain-wasting disease that affects some 5.8 million Americans. While there are other drugs that temporarily improve some symptoms, none slow or stop the eventually lethal destruction of brain neurons, the Alzheimer’s Association said in a report last year.
Aducanumab has also become a singularly important drug for Biogen, which has seen its market value fluctuate substantially over the past two years as it halted study on the drug, restarted its research, and then submitted it to regulators for approval earlier this year.
Shares of Biogen were halted throughout the regular trading day on Friday. On Wednesday, the stock surged 44% after the upbeat assessment from the FDA staff, though some of those gains were given back Thursday, when Biogen slid 7.5%.
“We will continue to work with the FDA as it completes its review of our application,” Michel Vounatsos, chief executive officer at Biogen, said in a statement.
The advisory committee’s recommendations aren’t binding. The FDA often calls on panels of experts, including researchers, medical professionals and patient representatives, when it is considering whether to approve a new drug. Wall Street analysts said the FDA seemed set on viewing the drug positively.
“This will be a test for the FDA on what happens when the FDA is on one extreme and the panel is seemingly on the other, with science and evidence or the lack thereof being at the core of discussion,” Mizuho analyst Salim Syed said in an email to Bloomberg News.
(Barron's) Covid-19 isn’t the only illness scientists are trying to cure right now. Investors were reminded of that this past week when
Biogen’s Alzheimer’s drug got a boost from
reviewers in the U.S. Food and Drug Administration, ahead of a Friday meeting of outside experts. The expert panel then voted—10 to 0—that
Biogen’s studies didn’t prove the drug’s effectiveness.
Investors should think twice before chasing Biogen’s stock higher.
Biogen stock (ticker: (BIIB) gained 47% on Wednesday, after the FDA released documents showing that the agency leaned toward approving the drug aducanumab. The agency expressed regret that Alzheimer’s patients had gotten no new drugs since 2004.
The FDA’s favorable tilt appeared to be the end of a long and painful journey for Biogen investors. Biogen stock has gapped up or down, depending on the aducanumab news. Biogen tumbled 30% in March 2019 when
Phase 3 trials appeared to show that the drug didn’t work. Seven months later, it gapped up 43% when
Biogen said it had reanalyzed the data and concluded that maybe a high dose of the treatment was effective after all. It was halted ahead of Friday’s meeting, at $329.
In briefing documents ahead of the meeting, the agency concluded that Biogen “has provided substantial evidence of effectiveness to support approval.” The agency’s own statistician, however, concluded that “the totality of the data does not support the efficacy of the high dose.”
Throughout the hearing, the Alzheimer’s experts repeatedly complained that the FDA was explaining away weaknesses in Biogen’s data and seemed to want the experts to do so, too. It’s not that there isn’t a desperate need for an Alzheimer’s drug, all the advisors concurred. More than five million Americans suffer from the disease, which is the sixth leading cause of death in the U.S. each year. While acknowledging the misery of Alzheimer’s, several panelists warned that approving an ineffective drug would not help patients and would send the wrong signal to the drug industry.
Many analysts on Wall Street appear to agree. “If it’s approved, 1) futility analyses don’t matter, 2) statistics don’t matter, 3) [advisory committee] panel votes don’t matter,” wrote Raymond James’ Steven Seedhouse, after the hearing.
Biogen and the FDA clearly believe otherwise, and if the agency wants to ignore its outside experts, then questions about aducanumab’s efficacy might be irrelevant. Maxim analyst Jason McCarthy argues that demand for a new Alzheimer’s treatment might outweigh those concerns. There is a precedent. Some 20 years ago, demand for an Alzheimer’s drug led to approval of acetylcholinesterase inhibitors, which McCarthy describes as having “modest efficacy at best.” “Could aducanumab be on a similar track?” he wrote before the panel vote. “FDA seems to ‘want’ this drug approved, so the answer may be yes.”
If the drug gets the FDA’s go-ahead, the question becomes how much pickup it could get. SVB Leerink analyst Marc Goodman rates Biogen stock Outperform. He quoted a doctor who said it would take time for the drug to catch on, largely because the regular testing, monitoring, and space needed to receive the infused drug is difficult in this Covid environment. Over time, however, aducanumab would likely become the drug of choice for treatment in early Alzheimer’s.
“Adu should be approved for treating early AD and ultimately become a significant product,” Goodman writes. He has a price target of $402 on the stock.
But even if the FDA approves Biogen’s drug, it’s better to wait for the pullback than to chase the stock higher. “Given where the stock is trading as we write this (~$340) the risk-reward does not suggest a compelling buying opportunity,” writes Bernstein analyst Ronny Gal.
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