Did the market overreact to Biogen's Alzheimer's data?

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Biogen and Japanese drugmaker Eisai created a surge in hope for an experimental Alzheimer's drug called BAN2401, after the companies announced positive results in a late-stage trial.


That hope translated directly into stock gains, with Biogen shares closing around 20% higher on Friday after the announcement. As of Tuesday, it's at $345.44.  


Though the full data won't be released until later this year, patients receiving the highest dose of BAN2401 saw a statistically significant slowing of disease after 18 months of treatment. If it does ultimately prove safe and effective, BAN2401 could satisfy one of the most significant areas of unmet need in medicine.


The market certainly reflected that optimism. Following the announcement by the companies, Eisai's shares shot up as much as 14.6% and is currently at $99.03, while Biogen's increased 7% to $320 and has only continued to climb.


But experts caution that an overabundance of hope might lead to disappointment. As The Wall Street Journal points out, a press release from Biogen did not disclose crucial details, like how many of the 856 patients who took part in the trial actually received the highest dose.


That prompted a careful response from some. Analysts from Leerink Partners noted, “We do not include BAN2401 in our revenue forecast at this time and would need to see a more complete representation of the data at a medical meeting in order to make any corresponding adjustments to our model.”

But that doesn't mean we should curb all enthusiasm until the readout. Quite the contrary, Dr. Ben Weintraub, president of inThought Research, told MM&M.

“I think that Alzheimer's disease is the holy grail of drug discovery, and it's a been a difficult quest,” he said. “There have been so many disappointments over the last 10 or 15 years.”

By Weintraub's estimation, Friday's news spurred two main questions: First, are the results for real, or will BAN2401 fail in Phase 3, just like those before it? And second, when will we know?

With regards to the first question, Weintraub said a healthy degree of skepticism is probably a good thing. Eli Lilly's once-promising solanezumab suffered a memorably disastrous flame-out, and Weintraub was quick to acknowledge that such a disappointment was liable to happen again.

“Those are quite analogous situations,” he said, adding that some might believe that the trial design has improved, and that Biogen's antibody is different. “But,” he said, “you would be foolish to not at least consider the possibility that this was a spurious result by chance.”

As far as a timeline, Weintraub says five years is a realistic hope when it comes to finding out whether Phase 3 results are replicable. Biogen will undoubtedly release a more ambitious timeframe, likely something closer to three years, though Weintraub points out the trials are long.

It's also possible that the burst of media attention Biogen has received may prompt more patients to participate, though it is unlikely that even that would make a significant difference.

So did the market overreact? Weintraub feels that any strong initial reaction will be tempered by time, and the chance that results may not replicate, although the answers, of course, lie in the full data. Its release will undoubtedly result in a more complete picture, and provide answers to questions like why the drug was more effective at 18 months than it was at 12.

Regardless of how long it takes, Weintraub himself is cautiously optimistic.

“I desperately hope that this stuff works,” he said. “As much as we've been led down false paths before I really hope this is the time.”


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