Why This Alzheimer’s Study Is Crushing Biogen Shares

Biogen Halts Promising Alzheimer's Drug Trials Due to Disappointing Results

Biogen scraps two Alzheimer drug trials, wipes $18 billion from market value

Why do companies, such as Biogen and Eisai, still spend billions of dollars attempting to bring through treatments when the success rate is so low?

The Cambridge, Massachusetts-based company and Japanese partner Eisai said that they would end two late-stage trials created to evaluate the efficacy and safety of the drug, aducanumab.

It was so promising that the company was running two phase three trials simultaneously, said neurologist Dr. Richard Isaacson, who directs the Alzheimer's Prevention Clinic at Weill Cornell in NY.

Dozens of experimental drugs have failed in the race to treat Alzheimer's, the most common form of dementia. In March 2014 Eisai and Biogen entered into a joint development and commercialization agreement for BAN2401 and the parties amended that agreement in October 2017.

Without its potential blockbuster Alzheimer's drug, Biogen now needs "a more aggressive business development approach to de-risk and diversify" its pipeline, said RBC Capital Markets analyst Brian Abrahams in a note to investors on Thursday.

Biogen said it dropped the Phase III global trials in Alzheimer's it was conducting with Eisai after independent analysis implied the trial was unlikely to meet its primary endpoint.

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"This disappointing news confirms the complexity of treating Alzheimer's disease and the need to further advance knowledge in neuroscience", Biogen Chief Executive Officer Michel Vounatsos said. It afflicts about 5.5 million Americans, with cases expected to triple by 2050. Aducanumab's promise prevented many investors from seeing the competitive risks to the company's multiple sclerosis and spinal muscular atrophy businesses, he said.

"Alzheimer's brain changes start decades before symptoms start to show and it is possible that anti-amyloid treatments may show benefits if given even earlier in the disease".

Major drugmakers, including Eli Lilly and Co, AstraZeneca Plc, Roche Holding AG, Pfizer Inc, Merck & Co and Johnson & Johnson, have abandoned Alzheimer's drugs targeting amyloid because of lack of efficacy or safety issues.

Others are pursuing targets aimed at reducing inflammation, which is believed to play a role in the very early formation of the disease.

Eisai said the Phase 3 study is meant to support a regulatory filing for the asset following discussion with regulatory agencies based on the results of a Phase 2 study. Detailed data from these studies will be presented at future medical meetings. "If they want one more shot on goal, I would think that would be a business decision rather than a strong scientific decision".

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