In week full of major earnings announcements, one company is getting some extra attention, but it has nothing to do with their financials. Biogen (BIIB) is a large biotechnology company based locally in Cambridge. According the company’s website, they “specialize in the discovery, development, and delivery of therapies for the treatment of neurological diseases to patients worldwide.” As many sources are now reporting, the biotech issued a stunning reversal on a cancelled drug trial for a possible treatment of Alzheimer’s.
For someone who has seen firsthand the effects of this devastating disease, the possibility of some form of treatment is incredibly encouraging. This disease, unlike many others, has had few developments over the years. When news of Biogen’s walk back of this treatment first emerged, it sent the company’s stock soaring 37%.
The treatment in question is Aducanumab, and to understand how it works, we must dive into some technical jargon. According to Alzheimer’s News Today:
“Alzheimer’s disease is a progressive neurodegenerative disorder characterized by deposits of protein structures called amyloid plaques … in the brain, leading to brain cell death.
Amyloid beta (Aβ) is normally present in the brain as a single protein, or monomer. In Alzheimer’s disease, however, it aggregates into clumps that can disrupt communication between brain cells and cause their death.
Aducanumab is an antibody, a protein designed to interact with a specific target.… it works by targeting Aβ… (and binding to) the aggregated Aβ. Through this interaction, aducanumab could reduce the number of amyloid plaques present in the brain.”
Now, by no means and am I a medical professional nor do I play one on TV. That being said, this announcement, assuming it will be approved by FDA, is a breath of fresh air for those suffering this illness and their families. However, as a put my analytical hat on, it does raise some questions on how this trial was cancelled in the first place. Bloomberg reported that the trial was initially cancelled in March due to a review of a “‘futility analysis’ of data, which revealed the trials had little hope of succeeding.” It wasn’t until very recently; did they discover that the trials did show positive results.
It would seem that a potential treatment for Alzheimer’s, which could be worth billions of revenue for Biogen, was almost lost because someone incorrectly interpreted the data? As an investor (in general, I do not own shares of Biogen), it concerns me that this potentially very profitable cash flow was sitting on a shelf for over 6 months. Could this be a management issue? Could this be an indicator of underlying company wide issues where standard operating procedures for the review and interpretation of data have not been established?
As someone who has seen a strong confident woman, turn into a frail shadow of her former self, seemingly overnight, I pray that is not the case. A treatment is long overdue. Biogen will have its hands full convincing the FDA why the trial was cancelled and that Aducanumab can be a successful treatment. That aside, many questions still linger about this treatment and why it took so long for the company to figure it out.
Dry Powder 