Is the FDA deadline really good news for Biogen’s Alzheimer’s drug?

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The Food and Drug Administration (FDA) recently extended its approval or rejection deadline Biogen (NASDAQ: BIIB) and Eisai‘s (OTC: ESALY) Aducanumab, drug against Alzheimer’s disease within three months to June 7, 2021. In this video by Motley Fool Live, registered on Feb. 1, Fool.com contributors Brian Orelli and Keith Speights discuss how the delay could actually be good news for businesses.

Brian Orelli: Biogen and Eisai suffered a three-month delay for their Alzheimer’s disease drug, aducanumab. A quick story back, they did the clinical trial, it didn’t seem like it was working. They stopped the trial. They took a closer look at the data and found that there was effectiveness when patients were given more of the drug. The FDA called the advisory committee to review the data. The FDA sends its review to the advisory committee ahead of the meeting. It was pretty positive, with the exception of one statistical reviewer, they didn’t like the fact that they stopped the trial and then started again, which isn’t something you would normally do – or stop the test. ‘test and then look at the data and decide it was positive. The committee of external experts voted against the drug’s recommendation. Biogen provided additional information at some point during the review process, allowing the FDA to push the date back three months, which it did. June 7. Do you think it’s a good sign for Biogen if the FDA was going to do it, I’m not sure they would ask for new data. They might just ask for a new trial now.

Keith Speights: Yes. Well, Biogen stock jumped on this news. It’s kind of a catch-22, or maybe not catch-22 is the best expression, but if there’s a candidate that everyone thinks has a good chance of getting approved and the FDA is delaying, the stock is falling. This is fundamentally not good because getting the market has been postponed. If this is a candidate that everyone thinks is probably going to be rejected and the FDA pushes back their review, then everyone thinks, maybe wait until there is a chance, maybe there is. there is a chance. I think that’s what’s going on here. I think everyone is saying, okay, it looked like the FDA was clearly going to reject this one after the advisory committee recommended against approval. Now there’s a chance the FDA will come back and say, OK, we’ve found enough in the data to approve this Alzheimer’s treatment. It remains to be seen. I don’t think anyone should bet on this because you just don’t know it, but it’s definitely better news for Biogen than many people expected.

Orelli: Yes, and I think people only looked at the approval rates of drugs that had three month delays because they had to provide new data and that’s usually a good sign that if you get a delay, you are more likely to get approved.

Speights: But I’ll say you and I both know this: It’s relatively rare for the FDA to come back and approve a drug after a unanimous advisory committee votes against.

Orelli: Yes. I think he has an uphill battle, but the FDA has the final say. They certainly have the option of overriding the committee of external experts.

Speights: It’s rare, but it has happened.

Orelli: Law. Yes.

Speights: It could happen.

Orelli: It could happen. It’s less likely, the way I generally think of advisory committee meetings is no means no and yes maybe means for the FDA. Usually no, usually means no, but not always.

Speights: I would like this therapy to be effective. Everyone wants a good treatment for Alzheimer’s disease. The landscape is strewn with failures. Drugs that look promising and haven’t worked. I wish there was maybe something in the data that shows it might be effective, but we’ll just have to wait and see.

Orelli: I think they need to do another clinical trial. As much as I hate it and especially for anyone who owns Biogen stock and for any patient who might want to get it and even hoping it will work. But from an investor perspective, I’d like to see an FDA where it’s pretty clear what data is needed. If you ask me before, can you do it? The answer would be categorically no. Now, if the rules change, it is much more difficult to cripple FDA decisions and therefore know if you should invest before an FDA decision.

Speights: I totally agree. Very difficult.

This article represents the opinion of the author, who may disagree with the “official” recommendation position of a premium Motley Fool consulting service. We are heterogeneous! Questioning an investment thesis – even one of our own – helps us all to think critically about investing and make decisions that help us become smarter, happier, and richer.

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