Disappointing Drug News Sends Biogen And XOMA Shares Down
Shares of Biogen Inc (NASDAQ: BIIB) were trading lower by more than 3 percent Wednesday morning after the company reported mixed results in a Phase 1 Alzheimer's study in which a 6MG dose failed to significantly slow mental decline.
"We are encouraged by these new results, which continue to show that treatment of prodromal and mild Alzheimer's disease patients with aducanumab resulted in a statistically significant, dose-dependent reduction in amyloid plaque, as well as a dose-dependent slowing of cognitive decline," said Alfred Sandrock, M.D., Ph.D., group senior vice president and chief medical officer at Biogen in a press release. "We have begun screening patients for our Phase 3 clinical trials. The results of the PRIME study give us hope that aducanumab may one day make a meaningful difference for people with Alzheimer's disease."
Despite the executive's encouraging statement, Matthew Herper of Forbes argued that Biogen's results "are likely to leave researchers and investors slightly disappointed."
Herper cited Ronald Peterson, a consultant for Biogen and director at the Mayo Clinic's Alzheimer's Disease Research Center, who said that Biogen's new data sets are "partially supportive but not totally convincing."
Cowen, RBC Cautioned Over Early Optimism
Biogen reported Phase 1b results of the study in March, which made investors excited over the prospects. However, Eric Schmidt, an analyst at Cowen, cautioned in early July: "While we are biased somewhat to the positive side, we lack conviction in this binary event."
"Aside from reading management's body language, we think it nearly impossible to call how the 6mg cohort might have performed at 52 weeks...we lack the conviction to recommend investors play this potential binary event," the analyst also argued.
Separately, analysts at RBC said they place the probability of Aducanumb success at 65 percent. The analysts did caution: "We won't know that for a while as Phase III just starting."
Xoma Crashing On New Results
Shares traded as low as $0.85 on Wednesday before rebounding and trading above the $1 per share mark.
"Although the study did not achieve its main objective, we did see signals of drug activity such as preserved visual acuity, less severe ocular exacerbations and a reduced incidence of reported macular edema in patients treated with gevokizumab," said Paul Rubin MD, Senior Vice President Research and Development and Chief Medical Officer. "We will continue to work closely with our partner, Servier, and uveitis experts to conduct a thorough analysis of the data to fully understand gevokizumab's impact on several clinically relevant endpoints."
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