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(Bloomberg) – Shares of Biogen Inc. fell on Monday and analysts braced for further declines after a U.S. Food and Drug Administration advisory panel harshly judged the effectiveness of the experimental treatment for society’s Alzheimer’s disease, dampening the prospects that it will be approved by the agency.
The stock fell 31%, the biggest intraday drop in more than a decade. Biogen’s market value has fallen by around $ 19 billion from last week’s rally.
Wall Street companies didn’t mince words this weekend about the panel’s findings that data from a single clinical trial with positive results was insufficient to show the treatment was working. Raymond James called it a “disaster”, while Baird wrote that the panelists had “confused the business.” Approval of the treatment, called aducanumab, is now “virtually impossible,” he added.
The panel’s finding sparked a boost for investors and analysts, as it came just after a positive FDA report on aducanumab sparked a historic rally, with stocks surging 44% to 355 , $ 63 November 4. it was interrupted before the contradictory conclusions of the advisory committee. Several analysts have suggested that if the FDA approves the treatment now, the agency would suffer a devastating blow to its reputation.
Already, three analysts have lowered their ratings, including an about-face from BofA where a downgrade comes after an upgrade on Wednesday. “We now find it hard to imagine a way for the agency to save anything positive based on an unequivocally negative adcomm,” Geoff Meacham said.
Jefferies predicted that Biogen shares would fall in a range of $ 220 to $ 250; they closed on November 5 at $ 328.90. It was “the most opposite of a positive panel-FDA informational book we’ve ever seen,” Michael Yee wrote in his review. Aducanumab approval could undermine the agency’s scientific integrity and “spark further skepticism [the] FDA when there is already a scrutiny of vaccines. “
The FDA review process will continue until there is a decision in March. Stifel expects the stock to remain volatile until then.
“We will continue to work with the FDA as it completes its review of our request,” Michel Vounatsos, CEO of Biogen, said on Friday.
Here’s what analysts say about the panel’s findings:
BofA, Geoff Meacham
There are cases where regulators have approved drugs after a negative panel vote, “but we think the political fallout here would be significant – and lead to major payers pullback and physician uncertainty.” Biogen will likely be performing another clinical study; if the company had relaunched an advanced stage trial last year, “significant clinical progress could already have been made”, supporting a 2022 candidacy
Cowen, Phil Nadeau
The discussion and votes were “a resounding and near-unanimous rebuke from aducanumab,” as well as from Biogen and FDA clinical reviewers. Although approval is unlikely, “it is not impossible because the FDA clinical team clearly wanted aducanumab to be on the market” and the agency is under no obligation to follow the committee’s advice. .
Raymond James, Steven Seedhouse
The panel “was a disaster for aducanumab”, which was “fully justified” as there is “no serious scientific argument for anything other than a new prospective study”
Baird, Brian Skorney
Underperformance, PT $ 228 Panelists “confused the business”, and the prospect of endorsing aducanumab “in the face of such an overwhelmingly negative vote and comments” is “virtually impossible”; it would “destroy the agency’s reputation” “It is perfectly clear that whatever relationship the director of the FDA, Dr. Billy Dunn has with aducanumab, its objectivity is completely lost”
Jefferies, Michael Yee
Buy, PT $ 450 This was “the most opposite of an FDA positive panel information book we’ve ever seen.” ‘The’ trade ‘is to buy the huge drop ahead and it probably goes up slowly’ Drug approval following panel ‘could raise more public skepticism around [the] FDA when there is already a careful review of vaccines “and” what that would mean “is not clear to the scientific integrity of the FDA
Stifel, Paul Matteis
Here, PT $ 258 Panel ‘Completely Confuses Things’, and’ Overwhelming Dissent ‘Puts the FDA in a Difficult Position If the drug is approved,’ there can be considerable political backlash in the taking agency decision “The FDA may take its time acting on the application, and the stock is likely to be volatile until the PDUFA action date in March
RBC Capital Markets, Brian Abrahams
Sector Performance, PT at $ 244 from $ 263 The stock is likely to ‘exceed lower’ as a result of the panel as a key driver of short-term potential value is’ likely gone ‘and’ the risks for existing products, the rest of the pipeline and the BD emergency become more exposed ”
Bloomberg Intelligence, Marc Engelsgjerd
The panel “makes the drug’s commercial success unlikely” because if the FDA approves aducanumab “after this clear vote of no confidence, it risks losing significant credibility” Click here for research
(Update trading in second paragraph)
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