Is New Alzheimer’s Drug the Stabilizing Force Biogen Idec Needs?

Published: Dec 03, 2014

Is New Alzheimer’s Drug the Stabilizing Force Biogen Needs?

December 3, 2014

By Riley McDermid, Breaking News Sr. Editor

News that Biogen Idec will be fast-tracking an experimental Alzheimer’s drug from Phase Ib trials to Phase III trials because of its enormously effective results on patients continues a consistent trend of anti-amyloid studies focusing on the mild patient subset, said Joshua Schimmer, a biotech analyst at Piper Jaffray, on Wednesday.

“It is plausible to believe that early intervention on amyloid is a requisite for success, so while many companies and investors have given up hope on this indication, Biogen seems to have a viable shot on goal left for this massive commercial opportunity,” wrote Schimmer in a note to investors.

The drug, dubbed BIIB037, binds to amyloid plaques in the brain as a way to slow the progress of Alzheimer's disease (AD).Biogen's head of research and development, Doug Williams, said Tuesday it had achieved those endpoints and more, reducing amyloid levels in “both a dose- and time-dependent fashion."

Williams said that BIIB037 improved cognition in patients with early signs of the disease 54 weeks after starting treatment, in a Phase 1 trial involving 200 patients. He added that Biogen will present full results of the trial at a medical meeting next year.

Analysts were upbeat about the results Wednesday.

“Investors finally have an attractive pipeline program to focus on to help alleviate pressure from ongoing MS drug launches, patent and PML considerations for Tecfidera, and uncertainty on the anti-Lingo program,” said Schimmer.

The news is also good for Biogen’s market reputation, which has suffered from a Street perception that it’s drug pipeline has been fickle and inconsistent.

“We believe this will finally bring stability to Biogens multiple while the bottom line continues to grow at 25 percent or more per year. As such, Biogen moves up on our large cap conviction list as our second favorite pick,” wrote Schimmer.

“We believe that as investors pick over multiple datasets for crenezumab and solenezumab that show a benefit in the mild patient subsets, consider that the bapineuzumab studies included patients without amyloid accumulation and reflect on the BIiB037 data,” said Schimmer, “they will see an attractive risk reward profile that skews largely to the upside considering the multi-billion dollar potential Alzheimer's opportunity. We look forward to a formal data presentation, complete with press release.”

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