Biogen pulls the plug on its Alzheimer’s drug

Biogen’s stock plummeted by more than 27% today on news that it will end Phase III studies of its Alzheimer’s treatment aducanumab. Although full results from the two late-stage trials aren’t expected until next year, an early look at the data by an independent review board shows that the drug, though safe, is unlikely to be effective.

Aducanumab, an antibody targeting amyloid-β, became the subject of much hype in 2014 when Biogen said it would leapfrog the drug into Phase III studies based on a small, but promising, trial. A few months later, Biogen revealed more details from that study which, for the first time, suggested a drug could slow the progression of the neurological disorder.

At the time, the Alzheimer’s research field had already seen high-profile implosions of several drugs that targeted amyloid-β or molecules critical to the production of amyloid-β. During the course of Biogen’s clinical studies on aducanumab, the failures grew to include Eli Lilly and Company’s solanezumab, Merck & Co.’s verubecestat, Roche’s crenezumab, and a second Lilly drug called lanabecestat.

Although Roche has an anti-amyloid-β antibody in development for people with a rare, genetic form of Alzheimer’s, many see the aducanumab failure as the end of the pursuit of an amyloid-β fighter. “In our view, this trial may signal the end of the current hypothesis of Alzheimer’s etiology,” Guggenheim stock analyst Yatin Suneja told investors.

The failure also puts pressure on Biogen to shake up its strategy. “Without the Alzheimer’s lottery ticket in hand, we believe the company faces an uncertain and difficult path forward,” J.P. Morgan analyst Cory Kasimov said in a note to investors. Among the biotech firm’s woes, he noted, are reliance on a long-in-the-tooth multiple sclerosis franchise, expected competition later this spring for its spinal muscular atrophy treatment Spinraza, and a lack of drug candidates that can drive growth.

Because of the high-risk, high-reward nature of the Alzheimer’s program, investors had already been pushing Biogen to buy in other drug candidates. The firm has made some smaller bets: Last year it paid $1 billion to develop more oligonucleotide therapeutics with its Spinraza partner, Ionis Pharmaceuticals, and earlier this month it agreed to buy gene therapy–focused Nightstar Therapeutics for $800 million.

Kasimov isn’t convinced the moves will satisfy investors. “It probably goes without saying that these overtures are only going to get louder,” he wrote.