Executive Shuffle and Alzheimer’s Drug Report Creates a Rocky Road for Biogen Stock

Executive Shuffle and Alzheimer’s Drug Report Creates a Rocky Road for Biogen Stock
July 13, 2015
By Alex Keown, BioSpace.com Breaking News Staff

CAMBRIDGE, Mass. – Biogen, Inc.’s stock could continue to be in for a rocky Monday following a 3 percent drop Friday that followed the announcement that Douglas Williams, head of the company’s Research and Development unit, will leave at the end of July to helm an unnamed startup venture. In addition to uncertainty over the company’s executive leadership, investors are also anxiously awaiting news of Biogen’s Alzheimer’s treatment which is expected later this month.

On Friday Biogen’s stock fell $10.73 per share to $388.56, while other biotech and pharmaceutical companies saw gains, the Boston Globe reported this morning. In Monday morning trading, Biogen’s stock continued its drop, down to $388.23 per share. Earlier in July, Biogen’s stock was trading at $407.98 per share following the announcement of a partnership with more than $1 billion with AGTC to develop gene-based therapies for multiple ophthalmic diseases.

After four years focused on restructuring the company’s drug focus, Williams will become “the first member of a new organization with potential in cancer diagnostics and therapy,” Biogen said.

Biogen’s stock soared earlier this year after Biogen revealed positive results with its experimental Alzheimer’s disease treatment. In April, Biogen announced its drug BIIB037, or aducanumab, led to reductions in brain amyloid plaque by as much as 71 percent. The plaque reduction was more pronounced as the dose of the drug increased over time and Biogen also announced the drug was able to reduce cognitive decline. Biogen is looking to begin a Phase III trial, which if it proves successful, would then lead the company to seek approval to market the drug.

Developing a treatment that target’s Alzheimer’s disease at the source, something that hasn’t yet successfully been managed, will be an expensive affair for any biotech company. Biogen’s executives speculated bringing the drug to market could cost approximately $2.5 billion, which would include costs of conducting clinical trials as well as construction of a manufacturing facility for the investigational drug.

Biogen plans to release some followup data to its Alzheimer’s trials July 22 at the Alzheimer’s Association International Conference in Washington, D.C. Biogen is due to report 12-month data on a 6 milligram dose of the drug, a dose that was added later than the others in an effort to balance efficacy against the amyloid-related imaging abnormalities, Investors.com noted.

The release of new information carries risks for investors in the company, the Boston Globe reported. An update on the drug treating amyloid plaque could “substantially alter the probability of success” for upcoming late-stage trials, the Globe noted. The update could swing Biogen’s stock $50 either way, the analysts told the media outlet.

“Should the 6mg cohort further confirm aducanumab's dose responsiveness ... we think investors might ascribe a 60-70 percent probability of success to the drug and that shares might trade up $50 or more,” Eric Schmidt, a Cowen analyst, told Investors.com. He added that if it fails it could fall by the same amount.

There are several drugs on the market that help manage Alzheimer’s, but none treat the primary cause. According to a Bloomberg report, there have been more than 100 failed efforts to develop a treatment for Alzheimer’s disease since 1998. Roche reported two failed drugs that targeted the amyloid plaque. Genentech , a division of Roche, is currently running an Alzheimer’s study in Colombia, spurred on in part by Biogen’s early successes with BIIB037.

Pharmaceutical giants Eli Lilly and Company and Pfizer Inc. have also reported setbacks with their experimental Alzheimer’s treatments. Eli Lilly does have another experimental drug in Phase III trials with results expected sometime in 2016. Lilly’s solanezumab targets the amyloid plaque.

Not only will Biogen’s stock be impacted by the July 22 Alzheimer’s drug report, but two days after that, Biogen is expected to announce second quarter financial results, which could also cause the stock to move in either a positive or negative direction. First quarter results were somewhat disappointing. Analysts at Alliance Bernstein said Biogen’s first quarterly reports were weaker than expected, primarily due to poor performance from Tecfidera, the company’s multiple sclerosis drug.

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