Shares of Biogen (BIIB) are on the rise on Wednesday after the company announced it has completed the submission of a biologics license application to the Food and Drug Administration for the approval of aducanumab, an investigational treatment for Alzheimer's disease. Jefferies analyst Michael Yee assumes Biogen will get a Priority Review based on the unmet need in Alzheimer's.
ADUCANUMAB BLA SUBMISSION: Biogen announced that it has completed the submission of a biologics license application, or BLA, to the FDA for the approval of aducanumab, an investigational treatment for Alzheimer's disease. The company said that the completed submission followed ongoing collaboration with the FDA and includes clinical data from the Phase 3 EMERGE and ENGAGE studies, as well as the Phase 1b PRIME study. As part of the completed submission, Biogen has requested priority review. If approved, aducanumab would become the first therapy to reduce the clinical decline of Alzheimer's disease and would also be the first therapy to demonstrate that removing amyloid beta resulted in better clinical outcomes, the company said.
PRIORITY REVIEW SEEN LIKELY: Biogen's completed Biologics License Application submission for aducanumab "finally begins the big journey of what will be a hotly debated FDA review," Jefferies analyst Michael Yee told investors in a research note following the announcement. The analyst assumes Biogen will get a Priority Review based on the unmet need in Alzheimer's disease. An FDA action date would be assigned thereafter and if Priority, a PDUFA would fall around March 8, 2021, Yee contended. The analyst values Biogen shares at $175 to $225 with no Tecfidera patent and no aducanumab. However, Yee assigns a 55% probability of aducanumab gaining approval. This "best case" could yield a share price above $500, the analyst added, noting that Tecfidera generic risk now in 2021 along with an aducanumab decision "could be a double whammy." He keeps a Hold rating on Biogen with a $320 price target.
'INCREMENTAL POSITIVE': Goldman Sachs analyst Terence Flynn called Biogen's submission of the BLA for aducanumab "an important first step and incremental positive," although he views the FDA acceptance or rejection of the filing in about two months and a potential FDA advisory committee meeting late this year or early next year as the more important nearer term catalysts. The central question is how the FDA will interpret the aducanumab Phase 3 data given a single positive trial, weighed against the unmet need in Alzheimer's, said Flynn, who continues to see risk to approval and assumes a 20% probability of success. He keeps a Neutral rating on Biogen with a $300 price target on the shares.
Voicing a similar opinion, Stifel analyst Paul Matteis noted that submitting a BLA is "obviously just step 1," and for the stock, the next event that will be telling will be FDA acceptance, and whether or not the agency awards the aducanumab submission priority review, which Biogen has requested. The analyst acknowledged that he has been skeptical on the clinical data package for aducanumab, and has discussed in a number of contexts his reservations with calling EMERGE a true positive study and issues with explaining away ENGAGE as a failure because of small differences in drug exposure, and a slightly more modest PETSUVR change. However, there's a significant political element to the review here, he contended, adding that he sees this situation as "unique," which is factored into his probability-of-success. Matteis has a Hold rating on the shares.
UPSIDE MOMENTUM POSSIBLE OVER NEXT MONTH: Also commenting on the news, Credit Suisse analyst Evan Seigerman highlighted that he sees aducanumab as the most important pipeline asset and the clear focus for investors over the next 10 months or so. Further, the analyst thinks investors will now take a second look at building a position/expanding/or reducing into the aducanumab events, and “could see upside momentum over the next month or so.” Seigerman generally expects FDA to accept the application and grant priority review. If FDA does not accept the application or does not grant priority review, the analyst sees "major issues with the aducanumab program." He has a Neutral rating and a $270 price target on the shares.
PRICE ACTION: In morning trading, shares of Biogen have jumped over 5% to $282.15.
Biogen
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