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The Ratings Game: Regulatory approval is next: Mizuho lifts Biogen to buy on news of Alzheimer’s drug success


Next stop regulatory approval.

That was the view of analysts at Mizuho Securities, who late Tuesday lifted shares of Biogen Inc.

to buy from neutral after the pharmaceutical group and its Japanese partner Eisai Co.

announced a promising, large study of its experimental Alzheimer’s drug.

The companies late Tuesday reported positive Phase 3 trial data for lecanemab, a drug that targets buildup of amyloid beta proteins from the brain, believed to be one cause of the dementia disease.

“The press release reads rather clean and actually has a fair amount of the relevant detail that investors needed here (more than expected). Of course, we will get the even more detailed data set at CTAD [ Clinical Trials on Alzheimer’s disease — an annual conference] on Nov. 29, but there’s enough in the press release that likely allows for regulatory approval and for the debate to largely shift to potential uptake of the product, in our view,” said Mizuho’s senior biotech analyst Salim Syed, who lifted the shares to $270 from $197.79 a share.

The companies said their drug lecanemab reduced cognitive and functional decline by 27% versus a placebo, over a period of 18 months in a Phase 3 study of 1,800 patients with early-stage Alzheimer’s. 

The study had been highly anticipated following the failed launch of another treatment, Aduhelm, also developed by Eisai and Biogen. There was no trade in shares of Eisai in Tokyo on Wednesday because buy orders overwhelmed sell orders even at the upper-end of the day’s trading range.

The Mizuho analyst cited efficacy as among the reasons for the upgrade, noting that the change in the so-called Clinical Dementia Rating scale Sum of Boxes (CDR-SB) at 18 months versus the placebo looked positive on both absolute and percentage terms. “The biggest question now on efficacy will likely be clinical meaningfulness,” said the analyst.

Safety of the drug also “seemed very in line with hitting the investor bogey,” with the incidence of ARIA-E, or swelling in the brain, at just 2.8%, “minor in our view,” noted Syed.

Investors will now be looking ahead to news of other Alzheimer’s drugs — Eli Lilly & Co’s

donanemab and Roche Holding’s

gantenerumab, both involved in Phase 3 trials that are due to see results reported over the next year.

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