One of the biggest news developments in the markets today came from a well-known pharmaceutical giant. While smaller biotech stocks are the ones that typically move drastically in a single trading day, Biogen (NASDAQ: BIIB) jumped by over 25% on Tuesday after it announced surprisingly positive news concerning its Alzheimer’s drug.
Biogen stated in an official press release that it was moving award to seek FDA approval for aducanumab, a drug that is targeted at treating early-stage Alzheimer’s diseases in patients. The decision was announced after the drug met its primary endpoint for a clinical study.
However, the main reason why investors were so surprised is that Biogen announced earlier this year that the very same drug was seeing poor performance and was unlikely to meet its primary endpoint. At the time, the pharmaceutical giant said it had chosen to discontinue Phase trials, however, newer results ended up changing this as it appears that this poor performance only pertained to a small subgroup of the initial patient population.
“With such a devastating disease that affects tens of millions worldwide, today’s announcement is truly heartening in the fight against Alzheimer’s. This is the result of groundbreaking research and is a testament to Biogen’s steadfast determination to follow the science and do the right thing for patients,” said Michel Vounatsos, Chief Executive Officer at Biogen. “We are hopeful about the prospect of offering patients the first therapy to reduce the clinical decline of Alzheimer’s disease and the potential implication of these results for similar approaches targeting amyloid beta.”
No one had expected such a major shift in clinical results. Guggenheim analyst Yatin Suneja remarked that aducanumab “has risen from the dead,” and that the drug has “the potential to completely change the profile of the company.” Now the analyst argues that Biogen’s stock could reach anywhere between $300 to $360 per share, a further 10-20% upside for the stock, while potential FDA approval could send the pharmaceutical giant soaring to new heights.
Shares of Biogen had jumped up as much as 40% in response to the news but ended the day up 26.1%. This would mark one of the best single-day gains for the company in well over a year and a pleasant recovery for the company since it’s earlier decline back in Q1 2019. In late March, Biogen’s stock fell by one-third in response to bad news and hasn’t recovered since. This new development, however, could be the major catalyst the stock needs to stage a major recovery.
Biogen Company Profile
Biogen and Idec merged in 2003, combining forces to market Biogen’s multiple sclerosis drug Avonex and Idec’s cancer drug Rituxan. Today, Rituxan and next-generation antibody Gazyva are marketed via a collaboration with Roche. Biogen also markets novel MS drugs Tysabri and Tecfidera. In Japan, Biogen’s MS portfolio is co-promoted by Eisai.
Hemophilia therapies Eloctate and Alprolix (partnered with SOBI) were spun off as part of Bioverativ in 2017. Biogen has several drug candidates in phase 3 trials in neurology and neurodegenerative diseases and has launched Spinraza with partner Ionis. – Warrior Trading News