Biogen Idec Inc (NASDAQ:BIIB) stock bolted up 9% on Friday after the massive biotech announced what could be a breakthrough in the treatment of Alzheimer’s disease.
Previously referred to as merely BIIB037, Biogen now calls the drug aducanumab, and the data from its Phase I trial of 166 patients gave compelling evidence that the drug slows the effects of cognitive decline in Alzheimer’s patients.
It’s no secret that Biogen Idec has been working on a promising treatment for Alzheimer’s; before today’s gains BIIB stock had rallied about 40% from its vague announcement in December that BIIB037 was slowing the rate of mental decline.
But today, we found out just how that drug was. The answer was welcome news for both the Alzheimer’s community and BIIB stock investors.
There’s Nothing Else Quite Like It
In a write-up by The New York Times this morning, the paper relates some of the extremely strong data that has BIIB stock soaring today:
On one measure of cognition, a 30-point scale called the mini-mental state exam or MMSE, those receiving the placebo worsened by an average of 3.14 points over the course of a year. The decline at one year was only 0.58 points for those getting the highest dose and 0.75 points for a middle dose. The difference with a placebo was statistically significant for both doses.
Far from being an orphan drug with limited applications, aducanumab could be a legitimate blockbuster if it succeeds in later stages of development. In an article I wrote on Jan. 30, I noted that while its multiple sclerosis treatments currently drive Biogen’s sales, “if BIIB037 can prove its efficacy in its trial data later this year, expect there to be another run-up in the stock price.”
The BIIB stock price is up about 18% since that article was written less than two months ago.
With no reliable Alzheimer’s drugs on the market and the graying of America in full effect, the medical and investment opportunities in this field are too large to ignore. Indeed, BIIB isn’t the only healthcare company working on a treatment. The problem, it seems, is replicating early-stage results in later, larger trials.
The jointly developed Alzheimer’s drug from Johnson & Johnson (NYSE:JNJ) and Pfizer Inc. (NYSE:PFE) was abandoned after failing in large-scale tests, and Eli Lilly and Co (NYSE:LLY) and Roche Holding Ltd. (ADR) (OTCMKTS:RHHBY) have both scrapped their respective projects in the field.
In other words, Biogen’s Alzheimer’s drug isn’t a guaranteed thing by a longshot. But it’s the most promising thing on the market, and with 25% of the American population projected to be 60 or older by 2030, whoever solves this problem first will make its shareholders a boatload of cash.
As of this writing John Divine held no positions in any of the stocks mentioned. You can follow him on Twitter at @divinebizkid or email him at editor@investorplace.com.
