It’s trick-or-treat time, and an individual who claims to be a former member of Biogen’s (BIIB, Financial) research and development team thinks investors who helped push the stock up 30% in the past week on news the company’s experimental drug for Alzheimer’s has been resurrected may be left holding the bag.
In an Oct. 28 opinion piece in STAT, Ted Whitford, who wrote he “worked on and around” the drug aducanumab for years," thinks the company may just be “spinning bad data.” A request to Biogen to verify Whitford’s statements went unanswered.
As Margaret Moran reported in an Oct. 25 GuruFocus article, aducanumab was all but left for dead in March when Biogen and its partner Easai Co. (TSE:4523, Financial) said they were abandoning the drug in Phase 3 testing because, in simple terms, it wasn’t working. Biogen’s shares were pummeled on the disappointing news, dropping more than $100.
Now, in a stunning reversal, Biogen said it will file for Food and Drug Administration approval of aducanumab based on additional data that showed the drug reduced the clinical decline in Alzheimer’s patients.  FierceBiotech reported the company said the result of the futility analysis was incorrect.
Of course, there’s no guarantee regulators are going to agree with Biogen, but the company likes its chances after huddling with the FDA and outside advisers. Those discussions make the company confident it has enough supporting data to file for approval in the U.S. early next year.
Whitford wrote he hopes the March analysis proves wrong, and that the drug does prove effective. But he remains skeptical.
Some who commented on Whitford’s concerns questioned his motivation, noting that he said he now “privately invests in the health care market.”
“The author probably has no training in scientific research and has no ability to analyze data,” Theo Yang wrote. “Now Biogen has released the hard data supporting their reversal, but he just chose to be doubtful and ignored the data released. Maybe he has a bad feeling that he no longer has BIIB stock or is shorting it to try to talk it down.”
Richard Meyer thanked Whitford for his perspective: “Given the need to satisfy Wall Street and putting patients second, I am not inclined to give Biogen the benefit of the doubt.”
Marc Hertzman, M.D., who said he worked as a field investigator on aducanumab,
wrote he thinks what Biogen probably saw is similar to what he learned after working on Eli Lilly’s (LLY, Financial) similar compound: that a small group of people may respond. He added, “The important question is: can these people be predicted in advance?”Â
It makes no sense that Biogen would intentionally attempt to deceive regulators, investors and Alzheimer’s patients, family members and caregivers. If it is shown they did, their reputation with these audiences would be irreparable and they could face Securities and Exchange Commission action.
The investment community seems to like Biogen’s chances of bringing aducanumab to market.
FierceBiotech reported that that analysts at JPMorgan were left speechless by the announcement. They noted there were some serious questions about the data, but that given the lack of an effective treatment for Alzheimer’s, the FDA may be more lenient in considering approval of the drug.
In another FierceBiotech article, Cantor Fitzgerald analyst Alethia Young said the investment banking firm is reviewing its model based on the Biogen announcement, but that the jump in share price is warranted as there is more than a 50% chance aducanumab will get approval.
Meanwhile, Guggenheim analyst Yatin Suneja thinks the drug could generate more than $10 billion in sales. “We also note that prior to aducanumab the stock was trading in the $300-$360 range and we would not be surprised if the stock re-rated itself in that range until we get final FDA decision.”
Even assuming Whitford is way off base, there are still a number of serious questions facing Biogen and aducanumab.
Disclosure: The author has a position in Eli Lilly.
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