Biogen Stock Crashes On Termination Of Alzheimer's Studies

Biogen (NASDAQ:BIIB) and its Japan-based partner Eisai announced the discontinuation of two late-stage studies evaluating their Alzheimer’s disease candidate, aducanumab. The decision was taken following a futility analysis conducted by an independent data monitoring committee (“IDMC”). The analysis showed that the studies are unlikely to meet their primary endpoints. However, there were no safety concerns.

Biogen’s shares crashed 29.2% following the disappointing news. Shares of the company decreased 24.6% so far this year against the industry’s rise of 14.4%.

Biogen and Eisai were evaluating aducanumab in two phase III studies – ENGAGE and EMERGE – in patients with mild cognitive impairment due to Alzheimer’s disease and mild Alzheimer’s disease dementia. Detailed data from these studies will be presented at future medical meetings.

The companies will also halt a phase II study – EVOLVE – and the long-term extension of PRIME phase Ib, which were evaluating aducanumab. The initiation of phase III secondary prevention study depends on further evaluation of data from ENGAGE and EMERGE studies.

Biogen has a strong position in the multiple sclerosis (“MS”) market. However, sales from this segment were relatively flat in 2018. The presence of drugs like Novartis’ (NYSE:NVS) Gilenya and Sanofi’s (NASDAQ:SNY) Aubagio has intensified competition in the market. Biogen is trying to build its portfolio beyond MS into Alzheimer’s, Parkinson's, stroke and others.

Aducanumab was a key candidate in Biogen’s pipeline. Successful completion of these late-stage studies would have been a boon for Biogen as there are only a few treatments approved for Alzheimer’s. One of them is Allergan’s Namenda.

However, the companies have another promising Alzheimer’s disease candidate, BAN2401. The candidate is in mid-stage development and has shown potential as a possible remedy in previously completed clinical studies. Biogen is also evaluating BIIB092 in a phase II study for Alzheimer’s disease.

Alzheimer’s, a fatal illness that causes progressive decline in memory, is a highly challenging area as multiple pharma companies have failed in their attempts to develop treatment.

In January 2019, Roche (OTC:RHHBY) discontinued two late-stage studies evaluating its Alzheimer’s disease candidate, crenezumab. The candidate was unlikely to meet primary endpoints of the studies as assessed by an IDMC.

In 2018, several large pharma companies including Merck, Pfizer (NYSE:PFE) and Lilly/AstraZeneca stopped development of their Alzheimer’s candidate either due to low possibility of success or safety concerns.

Despite the repeated failures, industry players remain committed to developing a treatment, given their strong commercial potential.

Companies that are currently working on Alzheimer’s disease treatments include Biogen, Novartis, AstraZeneca, Eisai and Amgen (NASDAQ:AMGN).

Biogen Inc. Price

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Biogen currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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