Biogen clears one Alzheimer’s hurdle; now comes the tricky bit
Biogen Idec’s market cap having put on $29bn since early data from the phase I Alzheimer’s disease project BIIB037 were revealed in December, the group needed the full results to be nothing short of a knockout to avoid disappointment.
Today the BIIB037 data delivered pretty much that, showing the anti-beta amyloid MAb to generate statistically significant and broadly dose-dependent improvements in cognitive function and biomarkers. The bulls will clearly be pleased that their exuberance was not misplaced; but with the stock hitting record highs this morning it is worth noting that a mammoth task still lies ahead.
The most obvious difficulty is translating the admittedly stellar phase I data into a statistically significant benefit in a much larger phase III programme, due to start this year. The well-documented phase III flops of Elan and Lilly’s beta amyloid agents bapineuzumab and solanezumab came in spite of early promise.
Another worry is that as the phase I data are now picked apart in minute detail any negative trends will have a disproportionate effect on Biogen’s current valuation. One thing to watch is safety, in particular imaging abnormalities thought to represent vasogenic oedema (termed ARIA-E) at the highest doses.
Not that any of these latent worries are of any concern to the sellside, which today greeted the phase I data, presented at the International Conference on Alzheimer's and Parkinson's Diseases in Nice, France, with enthusiasm.
Barclays analysts raised their price target on Biogen from $435 to $500, based on adding BIIB037 to their model at a 60% probability of success. Given its early development stage BIIB037, now named aducanumab, had generally not appeared in analysts’ revenue forecasts until now; Biogen stock was up 6% – another $6bn of market cap – in early trading.
It cannot be denied that the cognitive function efficacy data are strong (Event – Biogen’s latest opportunity to prove market exuberance right, March 16, 2015).
Patients given BIIB037 10mg/kg had average reductions in MMSE scores of 0.58 after 54 weeks, versus 3.14 for placebo, from a baseline of roughly 24 points. 1mg/kg and 3mg/kg doses gave declines of 2.21 and 0.75, with 3mg/kg and 10mg/kg hitting statistical significance, according to Biogen’s analysis.
The highest dose was also statistically significant in the CDR-SB test (0.59-point worsening versus 2.04 for placebo, from baseline of around 3.20) and all were statisticaly significant on amyloid plaque reduction – each case showing increasing numerical efficacy with increasing dose at one year.
Even though the patient numbers are low – around 30 in each arm – this all looks highly positive. A 6mg/kg dose was added later, and only six-month data are available so far; it might be concerning that these are trending in line with placebo on MMSE. Moreover, placebo declines look steeper than in solanezumab trials, though this is probably due to patient enrichment in the BIIB037 study.
Far more serious is ARIA-E, which at 10mg/kg occurred in 41% of patients, and in 55% of those with the ApoE4 genotype – a common, high-risk group. It is presumably because of this side effect that the 6mg/kg dose was added, even though the study investigators insisted that it was manageable.
On this point Dr Thomas Wisniewski, an Alzheimer’s disease expert from the New York University School of Medicine, disagreed strongly. “Most clinicians would find [55% ARIA-E] unacceptable,” he said on a call hosted by Mark Schoenebaum, an analyst at Evercore ISI, though he thought BIIB037’s efficacy was much better than solanezumab’s.
This might seem like nitpicking, but there is a serious point, especially with Biogen’s valuation already assuming such great things. Can the group repeat this effect in a large phase III programme, and can it use MMSE/CDR-SB or will it try to repeat the trick using the usual Adas-Cog endpoint?
Bernstein analysts wrote two days ago that “history should not be ignored... Small phase I/II trials are not very predictive of phase III findings.”
And can Biogen even find a therapeutic window for BIIB037? If the 10mg/kg dose is a write-off because of ARIA-E, and 1-3mg/kg just is not efficacious enough, it will all come down to 12-month data for 6mg/kg – and then on doing it all again in phase III.
Investors seeking the next share price inflection would do well to bear in mind just how much is at stake.