Biotech giant Biogen (NASDAQ: BIIB) shot up as much as 44% on Wednesday after the Food and Drug Administration (FDA) announced that it would be enlisting an advisory committee to rule on the company’s promising Alzheimer’s drug. Investors jumped on the news, as the decision to use an advisory committee usually leads to a positive recommendation.
For those unfamiliar with the drug development process, the FDA sometimes employs the assistance of scientific experts and specialists to form an advisory committee to make a recommendation over a particular drug candidate. Most of the time, these advisory committee rulings end up in a positive recommendation, at least according to the statistics.
At the same time, the FDA has historically tended to follow through with whatever the advisory committee recommends. As such, even if you know nothing else about Biogen’s drug, the fact that it will have an advisory committee is already statistically good odds for approval.
Biogen’s Alzheimer’s drug, aducanumab, has seen some highly promising clinical results so far in its development. As such, many investors and analysts regard this drug candidate as Biogen’s biggest blockbuster opportunity in the near future and could bring in billions in extra revenue every year. However, Biogen also has a few other notable drugs in development as well.
“We believe our pipeline has the potential to enable a second wave of growth in the mid-2020s” driven by areas such as ophthalmology, stroke, lupus and amyotrophic lateral sclerosis,” said Biogen CEO Michel Vounatsos, highlighting the company’s pipeline of other drugs that are coming up soon on the table. Out of Biogen’s 30 drugs currently in clinical development, eight of those are undergoing phase 3 trials.
However, not everything agrees with this optimistic assessment of Biogen’s pipeline. Some Wall Street analysts regard aducanumab as a make-or-break situation for Biogen, with shares likely plummeting on the off chance that it gets rejected by the FDA. While the odds seem to be more in favor of a positive ruling than a negative one, there’s always an element of uncertainty when it comes to the world of biotech.
Shares of Biogen shot up an astonishing 43% today, making it the best performing stock in the markets. That’s a big deal since Biogen was already a large-cap stock with a market cap in the tens of billions. While you tend to see jumps like these among small-cap biotech stocks, this kind of surge in a well-established company is super rare, and goes to tell you just how hyped healthcare investors are about this potential drug candidate.
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
