Biogen soared 43% on Wednesday after the company's Alzheimer's drug showed solid results in slowing the cognitive decline of patients.
The drug, lecanemab, slowed cognitive decline by 27% after 18 months in a phase three clinical trial.
The anti-amyloid drug helps remove plaque from the brain that is thought to play a role in the disease.
Biogen stock soared as much as 43% on Wednesday after the company said a phase 3 clinical trial of its experimental Alzheimer's drug, lecanemab, succeeded in meeting its primary and secondary endpoints.
Specifically, the drug helped reduce the pace of cognitive decline in people with early Alzheimer's by 27% over 18 months, compared to a placebo. That's a statistically significant result that represents a breakthrough in biotech's ongoing quest to end the progression of Alzheimer's.
"Today's announcement gives patients and their families hope that lecanemab, if approved, can potentially slow the progression of Alzheimer's disease, and provide a clinically meaningful impact on cognition and function," Biogen CEO Michael Vounatsos said.
Lecanemab is an anti-amyloid drug that helps remove plaque from the brain that is thought to play a role in the progression of Alzheimer's. The drug is separate from Biogen's aduhelm Alzheimer's drug, which was approved by the FDA last year in what was seen as a controversial decision.
Aduhelm has so far seen little uptake by the medical community due to conflicting trial results, a steep price tag, and little to no reimbursement for the drug. But the woes facing the early launch of aduhelm may not apply to lecanemab following such definitive phase three results.
"We see today's data supporting full approval for lecanemab... And assuming full approval, we would expect CMS reimbursement and a meaningful commercial opportunity for lecanemab (unlike the challenges faced by Aduhelm on the reimbursement front)," JPMorgan analyst Chris Schott said. Schott's preliminary estimates suggest lecanemab could generate between $6 billion and $10 billion in peak sales.
Biogen's positive Alzheimer's drug results is moving a handful of stocks that are focused on developing therapies in the space. Biogen developed lecanemab in partnership with Japanese biotech company Eisai, which saw its shares surge nearly 20% on Wednesday.
The lecanemab drug was originally licensed from BioArctic of Sweden, which saw its stock soar 168% in Wednesday trades.
Meanwhile, shares of Roche and Eli Lilly, which are both working on their own plaque-reducing Alzheimer's drugs, surged 5% and 8% on Wednesday.
Biogen is seeking accelerated FDA approval for the drug in early 2023, with January 6 set as the Prescription Drugs User Fee Act action date.