It looks like the recent controversy surrounding Biogen (NASDAQ:BIIB) is not dying down. In fact, bearish attitudes toward the company’s newest drug are seemingly coming back to haunt it. Now, hospitals are taking aim against the company, and BIIB stock is being sent tumbling today as a result.
On June 7, Biogen earned approval for its drug Aduhelm, the first prescription drug in 17 years approved by the Food and Drug Administration (FDA) for the treatment of Alzheimer’s disease. The approval catalyzed a huge upswing for BIIB stock to the tune of nearly 40%.
However, at the same time, the approval was met with tidal waves of controversy. Medical professionals heavily criticized both the drug and the FDA for allowing it to make it to market. Criticism levied at Aduhelm included the fact that it was rushed, that it had uninterpretable trial data and that it was distracting from other researchers’ efforts to develop further treatments.
BIIB Stock Falls as Two Major Hospitals Publicly Refrain From Aduhelm Use
BIIB stock is in for a rough ride today thanks to its controversies catching up to it. As Reuters reports, the FDA’s acting commissioner, Janet Woodcock, says “the process could have been handled in a way that would have decreased the amount of controversy involved.” In addition, it is coming to light that the FDA is independently probing into representatives’ interactions with Biogen prior to the speedy approval.
Building further on this bad PR are announcements from the Cleveland Clinic and New York’s Mount Sinai hospitals. Both hospitals, which are major healthcare players in their respective regional markets, are banning the use of Aduhelm on their campuses. The hospitals are waiting for more data regarding the efficacy of the drug before considering adoption of it in practice.
The news is quite damaging for BIIB stock, which is taking a tumble as a result. BIIB is down 7% on the day’s session. However, it’s worth nothing that trading volume is still meeting daily average numbers; it could even outpace the daily average through the closing bell.
On the date of publication, Brenden Rearick did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.