Drugs

Biogen's Alzheimer's breakthrough: shares soar nearly 40% after FDA approval

Tuesday, June 8, 2021 by Robinhood Snacks | Disclosures

Not vax-related... for once. The Food and Drug Administration has made headlines for another reason. Yesterday, the FDA approved Biogen's Alzheimer’s drug aducanumab (rolls off the tongue). Biogen shares soared 38% on the news. It's a big deal — so big that the Nasdaq halted trading of Biogen shares ahead of the FDA's decision.

  • #1: It's the first new therapy for Alzheimer's in 20 years. It's also the first FDA-approved drug to slow mental decline in people living with Alzheimer’s.
  • 6M people are affected by Alzheimer's in the US, where the disease is the sixth-leading cause of death.
  • $56K: The drug's list price per year. It's expected to generate billions in sales for Biogen.

There's a catch... The FDA approved it on the condition that Biogen conduct another clinical trial. Many Alzheimer’s experts aren't happy with the approval and its mixed supporting data. Some aren't convinced the clinical trial data was enough to prove the drug works.

THE TAKEAWAY

Drug stocks depend on drug pops... Which is why Biogen's five-year stock chart looks like a rollercoaster. In March 2015, Biogen stock was trading even higher than it was yesterday after it dropped positive early-stage data from an aducanumab trial (yep, the same Alzheimer's drug). Then in July 2015, Biogen released additional data about the trial that disappointed investors — and lost $20B in market value as its stock plunged. The results of Biogen’s next aducanumab trial could impact the stock again.