CHICAGO/TOKYO: Biogen Inc and partner Eisai Co Ltd are ending two late-stage trials of their experimental Alzheimer's disease drug aducanumab, a major setback in the quest to find a treatment for the mind-wasting disease and blow to Biogen, which lost more than US$18 billion of its value on Thursday.
Experts had seen aducanumab as one of the last true tests of the hypothesis that removing sticky deposits of amyloid from the brain of patients in earlier stages of the lethal disease could stave off its ravages, which include loss of memory and the ability to care for oneself.
The announcement took a punishing toll on Biogen, whose shares fell nearly 30 percent to US$227.82 in midday trading, its largest drop since February 2005, when Biogen shares fell nearly 43 percent to close at US$38.65 on Nasdaq.
The decision was based on a so-called "futility analysis" of aducanumab data, which revealed the trials had little hope of succeeding. The companies said the recommendation by an independent safety monitoring committee was not based on safety concerns.
Markets in Japan were closed for a national holiday so the impact of the news on Eisai will be delayed.
Eisai in July had touted promising but confusing 18-month results from another Alzheimer's drug, BAN2401, being co-developed with Biogen. That drug failed in a 12-month analysis.
Investors had been cautiously optimistic about aducanumab following early promising data. Without potential future revenue from Alzheimer's, Biogen has poor growth prospects as it faces patent issues over its big-selling multiple sclerosis drug Tecfidera and possible competition to spinal muscular atrophy drug Spinraza, Wall Street analysts said.
"We view this as a transformative failure for Biogen's pipeline," RBC Capital Markets analyst Brian Abrahams wrote in a research note.
Abrahams, who reduced his Biogen price target to US$240 per share, said further declines were likely given that "investors owned Biogen to not miss out on what could have been one of the biggest blockbuster products in the pipeline of large biopharma."
Any successful treatment for Alzheimer's, which affects about 5.7 million Americans, is virtually guaranteed to become one of the world's top-selling drugs. Even so, experimental treatments have had a dismal track record, with more than 100 failures.
The two halted trials were in the final stages of testing aducanumab in patients with mild cognitive impairment due to Alzheimer's and mild Alzheimer's disease dementia. Detailed results will be presented at a future medical meeting.
"This disappointing news confirms the complexity of treating Alzheimer's disease and the need to further advance knowledge in neuroscience," Biogen Chief Executive Officer Michel Vounatsos said.
Both Eisai and Biogen said they would continue to work on other Alzheimer's treatments.
Guggenheim analyst Yatin Suneja said Biogen instead should start looking at merger and acquisition opportunities in treatments that target the central nervous system.
"They need to stop wasting or stop investing money in Alzheimer's now," Suneja said.
Suneja said Biogen has about US$42 billion in financing capacity and should start looking at other companies in the space such as Sage Therapeutics Inc , GW Pharmaceuticals and Zogenix Inc.
"Those are very, very interesting companies that should be considered now, more seriously."
Major drugmakers, including Eli Lilly and Co, AstraZeneca Plc, Roche Holding AG, Pfizer Inc, Merck & Co, and Johnson & Johnson, have all abandoned Alzheimer's drugs over lack of efficacy or safety issues.
Scientists have long believed that to be effective, Alzheimer's drugs must be tested very early, before the disease begins destroying key parts of the brain.
Many companies are pursuing alternative theories for attacking Alzheimer's, such as focusing on tau, another Alzheimer's-linked protein, or on inflammation, which is believed to play a role in the very early formation of the disease.
(Reporting by Julie Steenhuysen in Chicago, Tamara Mathias in Bengaluru; Takashi Umekawa in Tokyo; Caroline Humer in New York; Editing by Kirsten Donovan, Bernadette Baum and Bill Berkrot)