Summary
- BIIB surprised the Street with news that it plans to file a BLA for aducanumab, or adu, in Q1 2020.
- Separately, BIIB reported upside EPS surprise for Q3.
- BIIB remains a valuable company even with its many pipeline uncertainties.
- I am adopting a buy-write strategy here, having been out of BIIB for a long time.
The news...
... was a shocker. Biogen (NASDAQ:BIIB) reported a strong Q3, which might have sent the stock up a few percent, but instead, pre-market, it had vaulted to perhaps $314 from Monday's close around $224. The reason for the surge - almost as if BIIB were a junior biotech - came in not the earnings press release but rather in the conference call and related presentation, namely that its lead Alzheimer's disease ("AD") candidate, aducanumab, will have a BLA (biologic license application) filed with the FDA in Q1 2020. From the CEO's prepared remarks:
As you know in March, we announced our decision to discontinue the Phase 3 EMERGE and ENGAGE studies for aducanumab in Alzheimer’s disease based on a pre-specified futility analysis. In retrospect the result of our futility analysis was incorrect.
Mr. Vounatsos explained that more data was obtained and:
Once we became aware of the potential implication of this larger dataset, we consulted with external advisors followed by the FDA with a Type C Meeting in June...
So, within approximately only three months after BIIB cratered on the discontinuation of the two Phase 3 studies for "adu," the company was hopeful of approval.
The company also kept investing in AD drugs, which was interesting, given the apparent bad results for adu and several other amyloid-modifying drugs. The analyst Geoffrey Porges addressed the topic in the July conference call. Here's some of his turn in the Q&A:
Geoffrey Porges
I have to ask follow-up on aducanumab. Previously, you disclosed that you are continuing to monitor the patients in the study and to see whether there was any evidence of clinical effect from the - in the pivotal studies with prolonged exposure. Could you share with us what you have found with that extended follow-up?
And secondly, in that context, how much are you continuing to invest in the amyloid hypothesis and particularly in 2401 and Elenbecestat, could you kind of reconcile those two for us?
Michel Vounatsos
Geoff, thank you for asking this important question. Obviously, since we did not present at AIC it is clear to everybody that we are not ready. We are not finished with our analysis of the data, first available at the cutoff date of the futility analysis, but also the data that is coming after the cutoff date of the futility.
So Biogen said and will continue to follow the science and these analyses have critical importance...
So we will present the results of ENGAGE and EMERGE studies at the future medical meetings and I hope you appreciate that we cannot say much more at this stage.
Fast forward two months to another conference, hosted by Morgan Stanley. Per the Seeking Alpha transcript, once again, the questioner was interested in why BIIB continued to put a lot of R&D emphasis in the amyloid-modifying sphere for AD. Here's a quote from the Q&A:
