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Adieu to Adu: Biogen’s Big Alzheimer’s Bet Flops, Shares Routed

Xconomy Boston — 

Another once-promising drug for Alzheimer’s disease has failed. And the news is devastating for the drug’s developer, Biogen (NASDAQ: BIIB), which went all in on a high-stakes gamble that its treatment, aducanumab, might succeed where so many others haven’t.

This morning, Biogen reported that it is stopping two parallel, highly anticipated Phase 3 studies in Alzheimer’s called “Engage” and “Emerge” because they are likely to fail. The news sent Biogen’s shares into a tailspin, falling by more than 27 percent, to $234 apiece—levels the Cambridge, MA, firm’s stock hasn’t traded at since 2013.

As a result of the news, Biogen said it will also stop a Phase 2 study of aducanumab, “Evolve,” and an ongoing, long-term extension study, “Prime.” It said it will present detailed data from the Engage and Emerge studies at a future medical meeting.

More than 5 million Americans have Alzheimer’s disease, most of them over age 65. As the population ages, the Alzheimer’s burden will grow. The Alzheimer’s Association estimates nearly 14 million Americans will have the disease in 2050. It’s the sixth-leading cause of death.

But no failure in Alzheimer’s drug development is a surprise these days. A pair of old cognition-boosting drugs were approved to treat Alzheimer’s in 1996 and 2003. Since then, one program after another has shown no ability to help slow the disease—often after thousands of patients have been tested and hundreds of millions of dollars spent. In January, for instance, Roche, like Biogen, pulled the plug early on two Phase 3 studies of an Alzheimer’s drug called crenezumab because they were likely to fail.

Today’s news is yet another dent in the “amyloid hypothesis” that many scientists believe to explain the underlying cause of Alzheimer’s. The amyloid hypothesis holds that Alzheimer’s is caused by the buildup of amyloid protein in the brain, and the longer the disease goes unchecked, the less chance there is to treat it. Yet drug after drug meant to break up the amyloid clumps or clear the protein from the brain have failed to halt or even slow the decline of patients’ memory loss. The failures have become so commonplace that some researchers have called on their peers to explore other ideas on the root cause of the disease. Drug makers are also testing drugs that attack the buildup of a different protein, tau, that is implicated in the disease.

The hope was aducanumab might be different. Unlike other, similar drugs, it had actually shown signs in early testing of slowing the decline of patients’ memory. Biogen bet heavily on its fate, planning to invest billions into the program. Just two months ago, it even announced plans to start a third Phase 3 study in pre-symptomatic Alzheimer’s patients. But the final result has been the same as the rest.

“This disappointing news confirms the complexity of treating Alzheimer’s disease and the need to further advance knowledge in neuroscience,” said Biogen CEO Michel Vounatsos in a prepared statement.

Indeed, the news marks a big setback not just for Alzheimer’s patients, but for Biogen. The company, by design under former CEO George Scangos, amassed a risky, neuroscience-focused drug pipeline, including a group of experimental Alzheimer’s treatments led by aducanumab. The pressure has been ratcheting up on the company to make a big splash for years because much of the company’s future fortunes have been resting on aducanumab’s fate, even with a recent $800 million buyout of gene therapy developer Nightstar Therapeutics (NASDAQ: NITE). That pressure is now amplified with the experimental drug’s failure—particularly with competition emerging against Biogen’s core multiple sclerosis business and challengers on the way for its spinal muscular atrophy (SMA) drug nusinersen (Spinraza).

“Many investors owned [Biogen] to not miss out on what could have been one of the biggest blockbuster products in the pipeline of large biopharma,” wrote RBC Capital Markets analyst Brian Abrahams in a research note. “And the failure will likely expose the significant risks to [Biogen’s] base MS business and SMA franchise.”

“It’s uncontroversial to say that Biogen now has a serious growth problem,” added Stifel analyst Paul Matteis, in a note.