28 BARRON’S February 8, 2021
chance for the drug—and for Biogen
(ticker: BIIB), which is counting on
the approval as its other products face
challenges.
The delay adds one more wrinkle to
a decision that could determine the
fate of the giant biotech, as well as
tens of billions of investor dollars and
the health of millions of Americans.
If the FDA approves aducanumab,
Wall Street expects the company’s
shares, which traded recently at $263,
to climb as much as 70%. Analysts
estimate the drug could bring in $10
billion a year in sales, or more.
The consequences of failure are
nearly as stark. Biogen’s core busi-
nesses are struggling, with many of its
most important drugs facing growing
challenges from competitors.
“It is basically a declining business,”
says Mohit Bansal, an analyst with
Citigroup. “In the case of an adu-
canumab non-approval, it just becomes
a very difficult investment story.”
A drug to treat Alzheimer’s disease
is an inherently risky bet. Even as the
pharmaceutical industry has made
huge advances in cancer and some
genetic diseases, progress on neuro-
logical disorders in general—and Alz-
heimer’s in particular—has stagnated.
Failed trial has followed failed trial, as
one drug after another has disap-
pointed.
If aducanumab fails, the nearest
alternative on the horizon is a similar
monoclonal antibody fromEli Lilly
(LLY) called donanemab, which Lilly
says performed well in a trial in early
symptomatic Alzheimer’s patients.
Lilly doesn’t plan to share details on
the trial until mid-March.
Aducanumab’s journey toward
approval would ordinarily have ended
at least twice by now. Biogen said in
March 2019 that it was stopping two
late-stage trials because the drug
wasn’t helping patients. Seven months
later, it said that the drug actually had
helped, after all. InNovember, the
FDA convened a panel of experts that
rejected Biogen’s analysis, voting over-
whelmingly that the company’s data
didn’t prove that aducanumab is an
effective treatment for Alzheimer’s
disease.
The FDA usually takes the advice
of its expert panels. But Biogen shares
are trading as if aducanumab has a
real chance—largely because of an
unusual back-and-forth between the
drugmaker and the FDA.
Evidence came in the form of a doc-
ument the FDA presented to its panel
of experts inNovember. Normally, the
agency will give the panel a lengthy
briefing book independently analyzing
the evidence for the drug it is asking
the panel to review. This time, FDA
submitted a 343-page document that it
had prepared with Biogen.
“There was a special relationship,”
says Marc Goodman, an analyst with
SVB Leerink. “You could crystal-
clearly see it. The briefing documents
were unprecedented. I’ve been doing
this job over 20 years and I’ve talked
to people who have been doing it lon-
ger, and we’ve never really seen any-
thing like that before, where the FDA
is just working that closely with a
company. They went to the [advisory
committee] basically saying, ‘This
drug’s getting approved.’ ”
BiogenGoesAll-In
OnAlzheimer’sDrug
FDA approval would cause the stock to soar. Rejection would lay bare
the biotech’s problems. Investors have a few months to place their bets.
“The upside is
incredible.
They would
have
unfettered
access to the
Alzheimer’s
market for
years.”
Colin Bristow, an
analyst at UBSA
fter 18 years without a
new treatment for Alzhei-
mer’s disease, an extra
three months for the Food
and Drug Administration
to decide onBiogen’s adu-
canumab might not seem
like long to wait.
Still, the delay, announced on Jan.
29, was unexpected. The agency’s
panel of outside experts has already
rejected the evidence for aducanumab.
Under normal circumstances, that
would have been the end of the com-
pany’s hopes.
But the FDA didn’t say no to adu-
canumab. Instead, it asked for more
time. Which means there remains a
By JOSH NATHAN-KAZIS
That’s what’s different about adu-
canumab, and why investors are hold-
ing out hope. Biogen said that the
FDA had requested additional data
that needed more time for review. The
FDA’s deadline has now been pushed
to June 7 from March 7.
The delay and the unusual relation-
ships between the drugmaker and the
regulator make it difficult for inves-
tors to game out a decision. “This out-
come remains unanalyzable,” wrote
Piper Sandler analyst Christopher
Raymond.
On an earnings call this past week,
the company offered no further details
on the delay, but said it remained con-
fident in aducanumab’s approval. “We
continue to stand behind our clinical
data,” Biogen CEO Michel Vounatsos
said on the call. “We believe our re-
sults support approval.”
The company plans to spend $600
million launching aducanumab in
2021, a third of which is reimbursable
by its Japanese partner,Eisai(ES-
ALY). Biogen’s chief financial officer,
Michael McDonnell, said on the earn-
ings call that the company has allo-
cated a “significant portion of its man-
ufacturing capacity to aducanumab,” a
decision that would “impact 2021 re-
sults” if the drug doesn’t receive ap-
proval.
The full-court press comes as
things begin to look grim for many of
Biogen’s most important products.
Its best-selling drug, a multiple
sclerosis treatment called Tecfidera, is
competing with a brand-new generic
version after an unexpected court rul-
ing this past spring. Analysts expect
its sales to fall to $1.7 billion this year
from $4.4 billion in 2019, when it ac-
counted for 31% of Biogen’s total sales.
In addition, Biogen anticipates
“significant erosion” in U.S. sales of a
cancer drug, Rituxan. Its other multi-
ple sclerosis drugs are also facing
growing competition, as is its $2 bil-
lion-a-year spinal muscular atrophy
drug, Spinraza.
Biogen has another shot at a huge
neurology market in the second quar-
ter, when a large study of a depression
drug it is developing withSage Ther-
apeutics(SAGE) returns data. A neg-
ative result, however, could hurt the
stock even more.
Wall Street expects Biogen’s earn-
ings to drop sharply in 2021, to $20.22
a share from $33.70 a share.
Biogen, meanwhile, has doubled
and redoubled its bets on adu-
canumab, even authorizing two sepa- Illustration by Dan Page