Analyst: Biogen's aducanumab is not getting approved absent a deus ex machina

Baird analyst Brian Skorney has dismissed the chances of Biogen winning approval for its Alzheimer’s disease drug aducanumab. Skorney’s skeptical reading comes days before Biogen is due to discuss data from its phase 3 program at the Clinical Trials on Alzheimer’s Disease (CTAD) annual congress.

The presentation of the full data on aducanumab at CTAD gives Biogen an opportunity to show why it is pushing ahead with a filing for approval of the anti-amyloid beta antibody despite it failing a futility analysis in phase 3. However, with Biogen’s resurrection of aducanumab sending the stock up 30%, Skorney thinks there is also scope for the presentation to spook investors. 

“We think it is underappreciated that CTAD could serve as a meaningful negative catalyst for [Biogen] shares, as we think the hype around [Alzheimer’s] will descend into a broader critique of the full data set and Biogen’s decision to file on it,” Skorney wrote in a note to investors. 

If Skorney is right, that will only be the start of Biogen’s problems. The analyst expects criticism of Biogen’s decision to file for approval of aducanumab to exacerbate concerns about the prospect of Roche’s risdiplam winning market share from Spinraza and a legal decision leading Tecfidera to face generic competition in 2021, rather than 2028.

With competition from risdiplam, the Tecfidera intellectual property ruling and the FDA’s decision on whether to approve aducanumab all scheduled for 2020, there is the potential for Biogen to suffer a triple whammy of bad news. Skorney thinks at least one of those potential pieces of bad news is likely to come to pass. 

“The preponderance of the data indicates aducanumab doesn’t provide a clinical benefit. If Biogen said based on this data it was running another study, the stock would be down because the data doesn’t justify investing in another study. The regulatory threshold is higher than that. The bottom line is, the FDA standard of approval is substantial evidence of efficacy and the cumulative data for aducanumab falls really far of this standard,” Skorney wrote. 

Skorney downgraded Biogen to underperform and kept his price target at $250. Biogen currently trades at close to $300 a share.