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BioGen Stock Jumps 40% after Alzheimer’s Drug Trial

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BioGen Inc. Logo on Building | Image by Shutterstock

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Pharmaceutical manufacturer BioGen Inc. reported a stock increase of 40% after a “key clinical trial” showed a new drug appeared to slow “the progression of Alzheimer’s disease.”

As reported by The Dallas Express, the new drug, lecanemab, works by removing “built-up plaque in the brain called beta-amyloid” and boosting cognitive function for those in the early stages of Alzheimer’s disease.

When lecanemab went through its final phase of testing, the results were “rather clean,” according to Mizuho Securities analyst Salim Syed.

Patients who took lecanemab in trials reported a decrease in the progression of cognitive decline of up to 27%. This was measured against a scale known as the Clinical Dementia Rating-Sum of Boxes.

One common side effect of amyloid-targeting clinical drugs like lecanemab is brain swelling. Trials reported that 21.3% of patients experienced some degree of brain swelling.

Dr. Howard Fillit, the chief science officer for the Alzheimer’s Drug Discovery Foundation, stated that BioGen’s trajectory appears promising.

He noted that “75% of Alzheimer’s drugs in testing today target non-amyloid approaches to the disease, [which] provides an incremental benefit at best.”

Furthermore, he said, “There is still a pressing need for the next generation of drugs focused on other targets, based on our knowledge of the biology of aging. We are optimistic about the future as many of these drugs are in development.”

Marc Goodman, an SVB Securities analyst, agreed that the results were encouraging.

“We expect that these positive results will reinvigorate the Alzheimer’s disease space and increase the focus of the investor community for the two near-term anti-amyloid betas (drugs),” he said.

BioGen and its clinical drug partner for lecanemab, Eisai, plan to file for drug approval within the U.S. before March 2023. Stock for Eisai soared 17% last week in Tokyo.

Thanks to the apparent success of the Phase 3 clinical study, there is a “high likelihood for full approval,” which would “transform BioGen into an earnings growth story again starting in 2024,” Brian Abrahams of RBC Capital Markets said.

BioGen has said it will hire a new CEO in the coming months.

“Much of BioGen’s future direction had rested on the outcome of this Phase 3 study of lecanemab,” Abrahams commented.

Despite impressive market and clinical results, some skeptics remain.

Analyst Ami Fadia of Needham commented that the results are not yet a “slam dunk” and that Medicare will not likely be on board to approve the drug for patients.

“We believe it’s still too early to say for sure that lecanemab will be a multibillion-dollar opportunity, but this likelihood is certainly higher now,” Fadia stated.

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