FDA outside advisors urged the rejection of Biogen’s drug for Alzheimer’s, aducanumab. Biogen stock plunged, but the company says it’s determined to seek approval for the drug.
Scott Eisen/BloombergBiogen stock fell nearly 30% on Monday when it resumed trading after last Friday’s scalding recommendation, by a panel of outside advisors to the U.S. Food and Drug Administration, that the company’s application to market its experimental drug for Alzheimer’s be rejected.
The expert panel also roasted agency reviewers for accepting what, the experts almost unanimously agreed, was unconvincing evidence that the drug aducanumab worked.
Aducanumab’s prospects sank and rose over several years of conflicting clinical trials. But Biogen stock (ticker: BIIB) leapt 47% last Wednesday when FDA briefing documents showed the agency’s disposition to accept Biogen’s claim that the drug worked. But the experts disagreed and voted eight to none—with another panelist saying he was uncertain—that Biogen’s trials failed to show evidence of effectiveness. The stock fell 28% Monday from it had been halted ahead of Friday’s hearing, to close at $236. That erased the last week’s gains.
In a curt press release following the bad hearing, Biogen glumly reported the negative votes, but indicated its determination to seek approval to market the drug for Alzheimer’s—a terrible disease that lacks any effective treatment.
Many on Wall Street had been doubtful of aducanumab before last week’s surprise endorsement by agency staffers like Billy Dunn, the acting director of the unit charged with approving neurology drugs. “Glad we weren’t gaslighted into upgrading,” wrote Baird’s Brian Skorney, after Friday’s expert panel seemed to vindicate his Underperform rating of Biogen stock.
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“[P]anelists skewered the company but were even harsher with the FDA presenter, Dr. Billy Dunn,” wrote the analyst. “The FDA presentation was so explicitly biased in its review to the point where the panelists even called it out in their commentary multiple times.”
The FDA has occasionally ignored the recommendations of its advisory panels, and aducanumab fans like Dunn could still approve Biogen’s application before the March 7, 2021, deadline. But that would “destroy the agency’s reputation at a very tenuous time for the regulator,” Skorney thinks. He thinks the stock has a few more dollars’ downside, to $228.
Others think the agency may approve the drug, including BTIG’s Thomas Shrader—who rates Biogen at Neutral—and Canaccord Genuity’s Sumant Kulkarni—who sticks to his Buy rating and $393 price target.
“[T]he ball is now firmly in the FDA’s court on approval,” the Canaccord analyst wrote in a Saturday note. He believes the advocacy by patients and their families may press the agency to allow the drug, while requiring Biogen to continue trials after approval.
Write to Bill Alpert at william.alpert@barrons.com
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