Local biotech giant Biogen says it plans to seek FDA approval for its Alzheimer's treatment "as soon as possible."
That was the word from Biogen's CEO, Michel Vounatsos, in a statement on Thursday announcing the company's financial results for 2019. The drug, aducanumab, has shown promise in slowing the progression of Alzheimer's, though its effectiveness came into question last year when the company abruptly stopped trials.
While nothing is certain in the high-risk, high-reward business of new drug development, biotech and biopharma companies like Biogen are benefiting from a relatively friendly regulatory environment, said Alethia Young, head of health care research at Cantor Fitzgerald.
"I think the FDA has been very supportive of getting drugs approved and collaborating with manufacturers," Young said, "and that's a big theme across all these companies."
The Food and Drug Administration (FDA) has been green-lighting new drugs at a faster clip in recent years. According to a recently published study from Harvard Medical School's Program on Regulation, Therapeutics and Law, the median review time for new drugs in 2018 was between 7.6 and 10.1 months. By contrast, the median FDA review time was 2.8 years in 1986-1992, and 1.5 years in 1993-2005.
On Thursday, Cambridge-based Biogen reported that its 2019 revenue was $14.4 billion, a 7% increase over 2018. The bulk of that growth came from the company's multiple sclerosis treatments (including the drug Ocrevus) and its treatment of spinal muscular atrophy called Spinraza.
But as far as health care investors are concerned, all eyes are on aducanumab, and whether it can clear the regulatory hurdles necessary to make it to market, said Sahak Manuelian, managing director of equities trading at Wedbush Securities.
"If it does in fact work, or shows that it works, it could be a huge blockbuster drug," Manuelian said.
FDA approval for aducanumab would be "one of the bigger moments of the year" for health care stocks, he said, because investors may be inspired to pour money into other biotech companies working on treatments for Alzheimer's or other serious diseases such as Parkinson's.
In late March 2019, Biogen's stock plunged from around $320 per share to around $216 per share following news the company was discontinuing trials for aducanumab after those trials showed it was not effective. Then, in October, the company reversed itself, saying that another analysis of the data showed aducanumab was effective at high doses. The announcement, while met with some skepticism, brought the share price back close to $300.
If the drug is eventually approved, Manuelian said the stock will probably move higher.
If on the other hand Biogen does not file for FDA approval, "then [the stock] gets crushed."
Correction: An earlier version of this post gave the wrong figure for Biogen's 2019 revenue. The post has been updated. We regret the error.