Shares of Biogen Inc (NASDAQ:) opened about 40% higher on Wednesday after the pharma giant reported positive data from the trial of its experimental Alzheimer’s drug, developed together with the Japanese biopharma company Eisai.
Results from the Phase 3 trial showed that the drug, called lecanemab, slowed the cognitive and functional decline in the early stage of the disease, for which many failed to find a cure. Numerous drugmakers have been attempting to cure the brain disease that affects roughly 55 million people on the globe.
A major breakthrough would also greatly help other drugmakers conducting similar studies, such as Roche and Eli Lilly (NYSE:). Shares of both companies are also trading higher today on news that the U.S. Food and Drug Administration could be more receptive to approving similar treatments for Alzheimer’s.
Lecanemab slowed the progress of Alzheimer’s disease in trial patients by 27% compared to a placebo. These results met the company’s primary goal, which could potentially lead to a historic breakthrough.
Referring to the newly-announced trial data, Mayo Clinic Alzheimer’s Disease Research Center director Ronald Petersen said:
“It’s not a huge effect, but it’s a positive effect.”
Eisai, a Japanese pharmaceutical company that leads its 50-50 partnership on the lecanemab, is awaiting approval by the Food and Drug Administration (FDA), which is expected to announce its decision in January. The company expects to win full approval and commercialize the drug in the U.S, Europe, and Japan by the end of 2023, said Eisai’s CEO Haruo Naito.
The results of the trial, in which 1,800 patients participated, reinforced the long-established theory that the removal of sticky deposits found in a protein called amyloid beta can slow the progress of Alzheimer’s in its early stages.
Just like its predecessor drug aduhelm, lecanemab is also an intravenous antibody that targets amyloid deposits. However, unlike aduhelm, the new drug attacks the forms of amyloid that haven’t yet stacked together.
“If you can slow a disease by almost 30%, that’s fantastic,” said Dr. Jeff Cummings, director of the Chambers-Grundy Center for Transformative Neuroscience at the University of Nevada Las Vegas.
The longstanding amyloid theory has been opposed by multiple scientists in the past, especially after the FDA approved Aduhelm in 2021 in a controversial move based on the drug’s memory-clearing ability rather than its power to slow the disease’s progress. The FDA granted the approval even though its own panel of outside experts voted against the decision.
While the new trial results are convincing, Dr. Kristian Steen Frederiksen, director of a clinical trial unit at the University of Copenhagen, believes it’s still “very early days” to jump to conclusions and guarantee whether the lecanemab’s effects are clinically meaningful. He reminds the public that Alzheimer’s “is an extremely complex disease and amyloid-related pathology is unlikely to be the only player.”
Other drugmakers are also in the race to develop a drug to fight the memory-affecting disease, which is expected to hit 13 million Americans by 2050, as per Alzheimer’s Association. On a global scale, that figure could reach 139 million by 2050 if no effective treatment is found.
Wall Street Reaction
As expected, the positive trial data received a warm welcome on Wall Street, with analysts describing the milestone as a “major positive” for Biogen and Eisai, as well as for Alzheimer’s patients. Investors are now turning more positive on Biogen as the company could soon gain FDA approval, which would ultimately boost its growth.
BMO analyst Evan Seigerman views the trial results as an “unequivocal win” for Alzheimer’s patients. In a note sent to BMO clients yesterday, Seigerman told investors that Biogen shares could jump to over $300 in case the trial results are very positive.
Similarly, Jefferies analyst Michael Yee thinks that this could be the start of a new multi-billion dollar franchise. The Phase 3 results are so strong that they should be enough for both FDA approval as well as for CMS (Centers for Medicare & Medicaid Services) insurance coverage.
Daniel Chancellor, a healthcare analyst at Citeline, said:
“There haven’t been many wins to celebrate, nor anything close to approaching a return on investment, so it is important that results like this are rewarded and incentivized.”
Biogen shares are trading sharply higher on Wednesday after the company presented extremely strong Phase 3 trial results for its experimental Alzheimer’s drug lecanemab. The study was a clear win for Biogen, which is desperate for new catalysts that will help reinvent its growth.