Biogen's (BIIB), stock soared higher after the Food and Drug Administration published "relatively benign", documents that suggested the agency may plan to approve the company’s Alzheimer's drug.
A panel of FDA advisors will meet on Friday to discuss Leqembi. The drug was granted accelerated approval by the FDA in January. The FDA is now considering converting this to a conventional approval based upon the results of Clarity-AD, a confirmatory trial.
Laura Chico, Wedbush's analyst, wrote in a client note that "the briefing documents are generally benign". We think the most likely result is a vote of approval, followed by a full vote.
Biogen shares rose by 2.4% in afternoon trading today on the stock exchange, near 307 dollars. MarketSmith.com reports that shares have bounced off of their 50-day average.
Biogen Stock: Comparisons To Aduhelm
Analysts compared Aduhelm, the first drug approved by Biogen, with Eisai's (ESAIY) long history of treating Alzheimer's.
The FDA approved Aduhelm despite the fact that panelists had voted against it in its advisory committee. The Centers for Medicare and Medicaid Services responded by stating that it would only cover Aduhelm patients who are enrolled in a confirmatory study. Biogen, meanwhile, quickly halted its Aduhelm advertising.
Leqembi & Aduhelm both use the same mechanism. Both Aduhelm and Leqembi remove beta amyloid, a brain plaque. Leqembi has now had two successful Phase III studies, whereas Aduhelm only had one.
Salim Syed, an analyst at Mizuho Securities, wrote in a note to his clients that the briefing documents for Leqembi were "super clean" and "don't see any surprises."
He mentioned Aduhelm's document briefing which had 130 pages, compared to just 35 pages for Leqembi. The panelists also had four questions on voting for Aduhelm, but only one for Leqembi.
He gave Biogen a Buy rating with a 340 Price Target.
Safety concerns surround Alzheimer's treatment
RBC Capital Markets' Brian Abrahams, an analyst at RBC Capital Markets, said that the FDA outlined Leqembi’s effectiveness and noted no new red flags.
The safety section, however, is slightly longer. FDA reviewers noticed a possible risk of swelling within the brain, known as amyloid related imaging abnormalities (ARIA). This is a side effect that occurs with anti-amyloid treatment like Leqembi.
ARIA is also more likely to occur in patients who have a genetic predisposition and are taking blood thinners. Leqembi can also cause an allergic reaction.
Syed, from Mizuho, said: "But there's nothing meaningfully new that's been called out. The FDA concluded that the risks are described in the prescribing instructions and don't appear to preclude the traditional approval of Leqembi."
Abrahams has also maintained his Outperform rating on Biogen and a 340-price target.
Biogen's future is still uncertain
Chico, Wedbush’s Chico, is less enthusiastic about Biogen’s future despite the excitement over Alzheimer's treatments.
Medicare, unlike its decision regarding Aduhelm will reimburse treatment with Leqembi only if it is fully approved. Medicare, however, requires that patients register in a registry. Chico describes this as a "key, gate-keeping factor."
Biogen's sales of its multiple sclerosis treatment are on the decline as generics take a bite out of them.
She said that Biogen's revenue growth is expected to decline, which is different from other companies. "Leqembi (depression treatment) and zuranolone launch must go well," she added. "Despite the likely approval we still expect challenging launch logistics as registry details need to be worked out."
She maintained her neutral rating for Biogen, but believes that "an encore to the Aduhelm Drama seems unlikely."