BIIB Biogen Inc

By Joseph Walker 

Biogen Inc. will seek regulatory approval early next year for an Alzheimer's disease drug, the company said, some seven months after pulling the plug on late-stage studies of the drug.

Shares of Biogen surged more than 36% in premarket trading, putting the company on track to add more than $16 billion in market value. When the company and partner Eisai & Co. in March said they would terminate the late-stage studies, Biogen lost about $18 billion in market value.

The Cambridge, Mass., biotech said Tuesday its reversal follows an analysis of a larger dataset from the studies that showed the drug reduced clinical decline in patients with early Alzheimer's disease who got higher doses. The drug is called aducanumab.

If approved, Biogen's drug would be the first to slow cognitive decline in Alzheimer's patients, a milestone in long-running but largely futile efforts to find a medicine that can treat the memory-robbing disease, rather than just the symptoms.

But whether regulators will clear the drug for sale, or if insurers will pay for it, is unclear. "We expect Biogen will have an uphill climb" convincing regulators that the positive signs it saw in its data analysis "were anything more than random chance," Baird analyst Brian Skorney wrote in a note to clients.

J.P. Morgan analyst Cory Kasimov said in a note that he was speechless aducanumab had come back from the dead. "We still have some major questions about the data and whether or not the filing will be ultimately approvable, but it's also hard to look past the unmet medical need and the FDA simply saying there's a chance," Mr. Kasimov said.

Biogen said it conducted the new analysis in consultation with the U.S. Food and Drug Administration, and it included data that became available after its initial look at results led to the decision to discontinue the studies.

In March, Biogen and Eisai had determined the drug would likely fail to help patients.

On Tuesday, Biogen CEO Michel Vounatsos told investors during a conference call that the companies' initial determination was incorrect.

Based on discussions with the FDA, the company said it plans to seek approval for aducanumab in early 2020 and it would continue talks with regulatory authorities in international markets, including Europe and Japan.

Biogen had been in discussion with the FDA since June and in a meeting on Monday, the company gained confidence to submit the drug for approval, Mr. Vounatsos said in an interview. "Until yesterday, it was still inconclusive," he said.

The new analysis is based on data collected from patients between December 2018 and March 2019 when Biogen conducted its futility analysis, said Samantha Budd Haeberlein, Biogen's vice president of late stage clinical development, in an interview. The new data showed that patients receiving higher doses of the drug had significant reductions in clinical decline compared with patients receiving a placebo, she said.

The reversal brings renewed hope to the hypothesis that has informed much of the recent research and investment into potential Alzheimer's drugs: that the buildup in the brain of a sticky substance called Beta amyloid plays a pivotal role in the disease.

Drugs like aducanumab have targeted the sticky tangles with the goal of slowing or halting the progression of the disorder. But a number of drugs developed with the idea in mind have failed.

Aducanumab was an important bet for Biogen because the biotech company has been looking to Alzheimer's disease treatment to fuel future revenue growth, especially as competition eats into sales of its core franchise of drugs treating multiple sclerosis.

Many investors were also taken by the company's wager on Alzheimer's. The massive market opportunity treating the memory-robbing disease -- potentially worth billions of dollars a year in sales -- as well as some promising data from early-stage studies attracted new investors to the company and helped drive up its share price.

Excited, too, by the potential opportunity, Biogen invested heavily in recent years to enroll thousands of patients in late-stage studies of aducanumab, some analysts said.

Biogen and Eisai, which had worked jointly on developing aducanumab since October 2017, had been studying it in the early stage of Alzheimer's. Researchers hypothesized that using the drug early in the disease might be a more effective avenue for amyloid-targeting therapy after previous such treatments at later stages had failed.

Write to Joseph Walker at joseph.walker@wsj.com

(END) Dow Jones Newswires

October 22, 2019 09:54 ET (13:54 GMT)

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