Biogen tweaks Alzheimer’s phase 3, sparking stock slide

Biogen HQ
Biogen's headquarters. (Biogen)

Biogen has spooked investors by disclosing midstudy changes to its late-phase Alzheimer’s program. The biotech is adding 510 patients to the phase 3 aducanumab trials after seeing more “variability” than expected in a sample size re-estimation.

Shares in Biogen fell as much as 9% in the aftermath of the revelation, which CMO Al Sandrock, M.D., Ph.D., made at an investor event hosted by Leerink Partners.

“We did do a preplanned blinded sample size re-estimation. We did see more variability in the primary endpoint than assumed when we did the original sample size estimation, so we decided to increase the sample size to maintain 90% power. Therefore, we’re going to add 510 patients to the two studies,” Sandrock said.

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Sandrock downplayed the significance the change. The CMO painted the re-estimation as a routine, per-protocol process, noting that Biogen applied the same statistical technique to its Tecfidera phase 3. He said Biogen’s assumptions about the efficacy of aducanumab are unaffected by the need to increase the sample size. The trial remains blinded and on track to finish enrollment in the summer.

That means Biogen has no greater insight into whether the trial will fail or succeed than before, and that it is still likely to find out in 2020. What the change does show is that the assumptions Biogen made about variability based on what it saw in phase 2 were wrong. 

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Biogen also got its forecast dropout rate wrong, although in that case the news is positive. Fewer patients than expected are dropping out of the study. Otherwise the study is progressing as expected. Sandrock noted Biogen has seen amyloid-related imaging abnormalities—an adverse event linked to aducanumab—but so far none of the detected safety signals have been “terribly surprising.”  

Those neutral to positive statements were blown away by the sample size estimation. Releasing details of the change at a conference, as opposed to through a SEC filing, blindsided investors. And with the recent Merck failure bringing Biogen’s odds of success into sharp focus, that led to the stock crash. 

The slide exposed the importance investors place on aducanumab. Jefferies analyst Michael Yee thinks Biogen needs to take steps to lessen the perceived significance of the drug to the future of the company.

“While we maintain a positive stance on data in 2020, we think [Biogen] needs to go out and buy derisked neuro/orphan companies to "change the narrative" to being a binary Alzheimer's company to one with products even if Alzheimer's doesn't work,” Yee wrote in a note to investors.