Biogen shares surge after US regulators approve Alzheimer's drug

Biogen shares surged after its controversial Alzheimer’s disease therapy was approved by US regulators, a landmark decision that stands to dramatically change treatment for the debilitating brain condition.

The stock gained as much as 64 per cent shortly after the news of the clearance, triggering a brief volatility halt. It ended up 38 per cent higher at $395.85, the biggest single-day gain since drug officials first said that the treatment appeared effective in November.

The Food and Drug Administration granted the antibody therapy an accelerated approval, which means Biogen will need to conduct more research to establish its benefits for it to remain on the market.

The approval is the first clearance of an Alzheimer’s therapy by the FDA since 2003, and one of the agency’s most consequential decisions in years. It’s also welcome news for millions of people with Alzheimer’s disease and their families. Patient-advocacy groups have supported the drug despite scepticism from some scientists about its mixed record in clinical trials.

The FDA said in a statement on Monday that it was allowing the drug on the market because it reduces amyloid, a sticky, harmful protein that clogs the brains of Alzheimer’s patients. Amyloid’s role in Alzheimer’s is debated, but numerous other drugs that target it are being developed by pharmaceutical companies.

Some patients may have temporary swelling in areas of the brain that usually resolves over time without causing symptoms, and some may also have small spots of bleeding, according to the drug’s label. In some cases, people with brain swelling may experience headache, confusion, dizziness, vision changes, or nausea.

Biogen plans to sell the therapy under the brand name Aduhelm. It will cost $56,000 a year, the Cambridge, Massachusetts-based biotechnology company and its Tokyo-based partner, Eisai, said in a statement.

Japan’s top government spokesman Katsunobu Kato said on Tuesday that the country would review the drug in an appropriate manner.

Biogen and Eisai filed for approval for Aducanumab in Japan in December. The decision will likely take a year, Jefferies analyst Stephen Barker told Bloomberg. Under the agreement with Biogen, Eisai can book all sales of Aducanumab in Japan and 80 per cent of potential profits.

US-traded shares of Eisai closed up 56 per cent at $116.03. They were untraded early in Tokyo on Tuesday amid a trading imbalance, with bids outweighing offers. The stock has risen 5.1 per cent so far this year.

Biogen chief executive Michel Vounatsos said that the company had already produced millions of vials of the drug and that it would hit the market within 10 days to two weeks, once the company had done things like printed labels.

Over 900 infusion sites in the US are prepared to administer the drugs, he said.

By giving the treatment a broad label allowing it to be used for a wide swath of Alzheimer’s patients, and not just the very early stage patients the drug was mostly studied on, “the FDA is basically empowering the physician to make the decision”, who it is most appropriate for, Mr Vounatsos said.

Biogen found out about a month ago that the FDA was considering giving the drug an accelerated approval on the basis of the drug’s ability to remove amyloid from the brain, research head Alfred Sandrock said. That led to labelling discussions.

Mr Sandrock said the company was still in talks with the FDA on details of the required confirmatory human trial and would provide details soon.

The long-awaited approval is certain to be scrutinised. Scientists are still furiously debating amyloid’s role in the disease, and Aducanumab’s clinical trial results were decidedly mixed.

In one giant trial conducted by Biogen, the drug was ineffective overall. A second, similar study found that high doses of the drug slowed progression of the disease by a modest 22 per cent over 18 months.

For months, scientists and doctors have been bickering about which of the results to believe. Biogen and proponents of the medicine have argued that one trial succeeded because patients received higher doses than in the study that failed.

Sceptics have said it’s just as likely that the successful trial was a fluke and argued that a third round is needed as a tiebreaker.

On a call with reporters on Monday, Peter Stein, director of the Office of New Drugs, part of the FDA’s Centre for Drug Evaluation and Research said patients are willing to accept the unknowns that come with the drug.

“We’ve heard very clearly from patients that they’re willing to accept some uncertainty to have access to a drug that can provide meaningful benefit in preventing progression of this disease as we all know can have devastating consequences,” he said.

Annual sales could peak at $5 billion, analysts have said, providing a needed financial boost to Biogen. Beyond the drug itself, healthcare system expenses will include the eligibility tests, infusions and expensive scans to watch for side effects such as brain swelling. It’s unclear whether insurers will readily pay for the drug and all its associated costs.

Other companies working on Alzheimer’s therapies also saw their shares soar.

Eli Lilly jumped as much as 16 per cent to a record high. Cassava Sciences surged as much as 19 per cent, while Annovis Bio rose as much as 31 per cent. The Nasdaq Biotechnology Index finished the day up 3.6 per cent.

Two years ago, Aducanumab appeared destined to take its place on the heap of failed Alzheimer’s disease drugs. In early 2019, Biogen and Eisai discontinued the two big trials after an initial analysis indicated they were unlikely to work. The drug appeared to be all but dead.

But later that year, the companies stunned outside researchers when they reversed course, and declared that one of the trials had worked after all. In November 2020, the FDA issued an unusual joint report with Biogen ahead of a meeting of an agency advisory panel, calling the data backing the drug “exceptionally persuasive”. That seemed to put it on a glide path for approval.

Days later, the FDA’s outside panel of medical experts showed itself to be far more sceptical. It voted 8-1, with two undecided, that the single successful trial was insufficient to prove the drug’s efficacy.

In January, Biogen and Eisai said the FDA pushed back its deadline to decide on the drug by three months to June 7. The companies submitted an analysis and clinical data in response to an FDA request for information that would take additional time to review, they said at the time.

In the months leading up to the decision, patients and advocates pushed hard for approval. The Alzheimer’s Association helped organise a session for patients to talk to FDA staff in January. In May, the group followed up with a five-day advertising and social media blitz.

Critics of the drug have also been outspoken in recent months, publishing journal articles and opinion pieces highlighting flaws in the drug’s data.

The approval is likely to put new strains on healthcare systems. A 2017 Rand Corporation analysis estimated that 88 million Americans 55 and older might be eligible for initial screening for a drug like Aducanumab, but only 2.4 million would ultimately be candidates for treatment.

Each step between screening and treatment poses a potential bottleneck. A limited number of dementia specialists are available to evaluate patients. Infusion treatment centres were preparing for a rush of demand before the decision, with some weighing extending their hours or adding capacity.

“One thing we know is there’s probably not enough infusion chairs in America to support the potential onslaught of people,” Charlie Schadewald, chief executive of Wasatch Infusion in Utah, said in May.

Payers including private insurers and Medicare will have to determine how to reimburse for the drug and associated care. Medicare doesn’t cover most scans for amyloid. The agency said last month that it was evaluating coverage and payment rules for Aducanumab ahead of the FDA decision.