The experimental and somewhat controversial drug for Alzheimer's disease is more likely to be approved by Biogen Inc. after Food and Drug Administration officials said there was enough evidence in clinical trials to prove the therapy was effective.
The FDA's release Wednesday ahead of a meeting of the aducanumab advisory committee referred to "substantial evidence of efficacy in support of approval," a stamp of support that has soared the biotech company's shares by 40% let.
Stock fell 7.3% on Thursday.
On Friday, starting at 10 a.m., a group of independent medical experts will meet virtually to discuss and then give the FDA a recommendation on whether to approve aducanumab, which is called Aduhelm when approved. The regulator is not required to follow the recommendation of the committee during the advisory committee meeting, but it often does. The FDA has until March 7th to make its final decision on approving the therapy.
Brian Abrahams, an analyst for RBC Capital Markets, who said he found the FDA documents "surprisingly supportive", notes that the FDA has a "clear preference for approving the agent".
See also:More clinical trials are needed for controversial Biogen drugs, Alzheimer's expert says
Much of the current investor interest in Biogen is focused on the revival of aducanumab and the continued hope that FDA approval is in the near future. However, some Wall Street analysts and medical experts remain skeptical about the drug's effectiveness.
Back in December last year, Baird analyst Brian Skorney told investors: "There are so many reasons why we think aducanumab will be rejected. Our word count restrictions do not allow us to bring them all here." At about the same time, Dr. Howard Fillet new studies evaluating therapy.
After reading the FDA document this week, James James analyst Steven Seedhouse told investors he was still not convinced the drug would work. "In fact, it reinforces our belief that the drug is unlikely to work," he wrote in a note Thursday. "We're not sure how to put it another way: the FDA could approve a drug that may not work. You only did it with remdesivir, so why not do it again?"
(Remdesivir is Gilead Sciences Inc.'s COVID-19 treatment and was fully approved by the FDA last month, although some experts have questioned how well the drug works.)
New research published Nov. 1 in the Journal of the Alzheimer's Association concluded that data shared by Biogen to date failed to substantiate the clinical benefit of aducanumab.
Read:What millions of Americans have in common with Seth Rogen and his wife: Care
There are currently no approved drugs to treat the Alzheimer's disease-related cognitive decline that aducanumab seeks to treat in patients. However, there are some therapies that can be used to treat some of the behavioral symptoms of the neurological disorder. Aducanumab approval could mean peak sales of up to $ 12 billion for Biogen, according to an estimate by Goldman Sachs quoted in a pharmaceutical journal earlier this year, and it would also be the first pharmaceutical success for an Alzheimer's treatment after a number of high profile events failures such as Eli Lilly & Co. & # 39; s
Solanezumab in 2016 and again earlier this year.
Biogen announced in March last year that it had stopped development of aducanumab after an analysis found the drug would fail to meet the primary endpoints in two Phase 3 studies. The day before the announcement, Biogen's share price was $ 320.59. The following day, shares fell to $ 226.88.
In mid-October last year, Biogen surprised investors by announcing new plans to revitalize aducanumab and file a regulatory application in the near future. Since then, the stock has largely rallied, hitting a two-year high of $ 355.63 on Wednesday. Salim Syed of Mizuho Securities told investors that aducanumab approval could push the stock down to $ 400, although failure would bring it down to $ 215.
Biogen stock is up 19.8% so far this year, while the SPDR S&P Biotech ETF is up 27% and the S&P 500 is up 27%