Biogen's (BIIB), stock price was halted on Friday, as a panel presenting data before the Food and Drug Administration discussed the merits and benefits of Leqembi, its Alzheimer’s treatment.
Leqembi received accelerated approval by the FDA in January. The agency will now determine if new clinical data are enough to give it full approval. The Centers for Medicare & Medicaid Services (CMS) will need to approve the product in full before they can reimburse the Alzheimer's disease patients.
Analysts believe that the FDA's briefing documents, which were posted Wednesday, indicate the agency has a leaning towards approval.
Biogen Stock: 27% Slower Decline
Leqembi's approval was accelerated based on a Phase 3 study. Companies must prove these benefits in subsequent studies. The FDA advisors will vote on Friday whether or not the results of the study Clarity-301 confirm the benefits of Leqembi.
In this study, Biogen (ESAIY), and its partner Eisai, reported that patients receiving the Alzheimer's drug had a 27% lower decline in cognition than placebo recipients over 18 months. Biogen's stock soared after these results were announced in November.
Drugs like Leqembi, however, can cause swelling of the brain known as ARIA, or amyloid-related image abnormalities. This is because they target an abnormal protein called beta amyloid in the brain. In the documents published Wednesday, FDA reviewers stated that those with a genetic disposition or taking blood thinners are at a greater risk for ARIA.
Salim Syed, an analyst at Mizuho Securities, wrote to clients that "the FDA concluded that the risks could be described in prescribing information" and did not seem to preclude the traditional approval of Leqembi.
He gives Biogen a Buy rating with 340 as the price target.
Alzheimer's Treatment: Enthusiasm for Treatment
Biogen's stock price has risen this year due to the excitement surrounding its Alzheimer's treatments. Wall Street expects Leqembi, unlike its first Alzheimer's treatment that received accelerated approval from Medicare, to receive a more traditional approval.
MarketSmith.com shows that shares broke out of the double-bottomed base in late April with a purchase point at 295.90. Biogen's stock is now in the 5%-chase zone, which spans from 295.90 up to 310.70.
IBD Digital also gives Biogen a score of 92. The shares are among the top 8% in terms of performance over a 12-month period.