Biogen stock (BIIB 242,27 -0,79 -0,33%) was hit hard Thursday morning due to mixed views for their Eisai-partnered Alzheimer’s treatment.
In morning trading today, Biogen fell 9.3%. close to 348.10. AC Immune, who is also working on an Alzheimer’s treatment, met a similar fate, with shares plunging 24.6%, near 12.40.
On Wednesday, Analysts were largely split on their opinions of Wednesday’s presentation of the drug know as BAN2401. Ranging across 3 metrics, BAN2401 showed that it slowed the progression of Alzheimer’s in patients with an early form of the disease. However, their were some patients that were excluded from the study, which sent their shares into free-fall.
Piper Jaffray analyst Christopher Raymond said investors were taking a “sell-on-the-news” view.
However, many analysts felt in order for BAN2401 to gain approval, they would need to prove a 15% benefit over the placebo’s. Well, BAN2401 hit that mark using the ADCOMS measure, and then some. At its highest dose, the medication showed a 30% slower decline in cognitive function, compared to the placebo. This was most definitely statistically significant.
The data gathered from this study supports Biogen’s hypothesis that Alzheimer’s disease is caused by a buildup of toxic plaque called amyloid, however this hypothesis hasn’t been confirmed yet.
The amyloid plaque buildup theory is the hypothesis surrounding Biogen and Eisaid’s other potential method for treating Alzheimer’s disease called elenbecestat.
At 18 months, patients who had been taking elenbecestat showed a statistically significant reduction in amyloid plaque. The drug also slowed the rate of cognitive function decline by 31% more than those who received the placebo.
The results are particularly interesting as the drugs belong to a class called BACE inhibitors. The way BACE inhibitors work is they prevent the buildup of the amyloid. Monoclonal antibodies, like BAN2401 and aducanumab both aim to remove it.
“Considering investors have pegged the probability on BACE inhibitors at zero, this is a positive,” Evercore analyst, Umer Raffat, said in a report to clients. Other BACE inhibitors from Merck, Eli Lilly , Astra Zeneca and J&J either have failed or been abandoned.
I’m not exactly sure why this stock took such a dive after showing results above analysts expectations, but it seems patients being omitted from the study was the main factor in scaring investors and analysts away from this stock and these drug trials. It also isn’t very heart warming that this theory has been abandoned by all other major pharmaceutical corporations, however, if there is a chance that this drug could slow the progression of this horrible disease, that would be a life changing breakthrough for a lot of people. And it wouldn’t hurt Biogen’s stock in the future either!