Biogen shares leap after ‘substantial evidence’ Alzheimer’s drug is effective

Biogen moved a significant step closer to winning approval for what would be the first new Alzheimer’s drug in the US for decades after staff at the country’s regulator said there was “substantial evidence” it was effective, adding almost $17bn to the company’s market value.

The Food and Drug Administration on Wednesday published a positive clinical review on the application for aducanumab, a potential treatment for the neurological disease that affects 5.7m people in the US alone.

The FDA reviewers addressed concerns that there was not enough evidence that the drug worked, after one of Biogen’s two clinical trials failed. They said the failed trial did not “meaningfully detract” from the results of the successful one, which it called “robust and exceptionally persuasive”. 

Biogen shares leapt 44 per cent to a two-year high, pushing the company’s market capitalisation to almost $55bn from $38bn at Tuesday’s close.

The company has argued that clinical data show aducanumab slows Alzheimer’s patients’ loss of memory, language and executive functions. The drug targets clumps of protein called beta amyloid that can build up in the brain.

“The applicant has provided substantial evidence of effectiveness to support approval,” the regulator’s reviewers wrote in their 343-page report. 

The document, published ahead of an advisory committee on Friday, is not a final decision, but it suggests how the agency will view the company’s submission. 

The prospects for the drug have been the subject of intense focus by investors and patient groups throughout its development, with hopes raised and dashed on several occasions.

Biogen originally halted both trials of the drug in March 2019, saying an analysis by an independent committee found it was not going to be effective. But in October last year it reversed course, claiming that a larger data set showed the drug did work at a higher dose.

The FDA said on Wednesday that the agency and Biogen had “jointly concluded” that terminating the programme early did not stop it from being able to interpret the data. 

Some experts have been concerned that the drug may not be effective, however. David Knopman, a Mayo Clinic neurologist who worked on one of the trials, called for a third trial focused on the higher dose, in a medical journal earlier this week.

Umer Raffat, an analyst at Evercore, said he did not think the data was “high quality” but he still believed the drug was likely to be approved.