Biogen soars on word of a successful Alzheimer's drug trial, paving the way for big sales after big spending
The results are in… and Biogen scored a multibillion-dollar win. This week the pharma giant announced that an experimental Alzheimer’s drug it’s developing significantly slowed cognitive decline in a large trial. The results boost the drug’s likelihood of snagging FDA approval, which could lead to blockbuster sales:
- Second time’s the charm: Biogen stock soared 40% yesterday, erasing its losses for the year. Last year Biogen got a different Alzheimer’s drug approved, despite iffy trial results. But that drug failed commercially after getting only limited Medicare coverage.
- Industry-wide win: Shares of Eli Lilly, which is also developing an Alzheimer's drug, spiked 7%. Shares of Alzheimer’s-focused biotechs Prothena and Acumen Pharmaceuticals surged over 85%.
R&D is a roller coaster… Pharma giants have tried to develop successful Alzheimer’s drugs for decades. Despite billions in R&D spending, there’s still no commercially successful drug proven to slow Alzheimer’s. But pricey R&D is common in pharma: it costs an average of $1.3B to develop a drug, and approval can take a decade.
Some industries are feast or famine… Bio-pharma revolves around trials. If the trial flops, it’s back to the billion-dollar drawing board. If it succeeds, it’s a “feast” for all involved. Those high stakes come with high potential rewards: Moderna notched a $1.2B quarterly profit (its first ever) after its Covid vax got authorized. It took Biogen lots of time and $$ to develop its most recent Alzheimer’s drug, but analysts say it could do up to $8B in annual sales.