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Regardless of the heated debates on the drug’s efficacy, Biogen (BIIB) stock has taken an uptrend, with the latest gain being the 4th in a row of gains in the past week.
Shares of Biogen Inc (NASDAQ: BIIB) shot up over 40% after the United States Food and Drug Administration (FDA) approved the company’s Alzheimer’s drug. Aducanumab is the first new medicine for the disease in nearly two decades.
Trading of the biotechnology company was halted earlier on Friday when the FDA announced the news and was paused again around 1:30 p.m. ET for volatility. Biogen shares hit a high of 60% before closing yesterday trading at $395.85, up 38%.
Marketed as Aduhelm, Biogen’s drug targets beta-amyloid clumps in the brain, making Alzheimer’s symptoms more manageable without slowing the disease. Periodic infusions cost $4,312 amounting to $56,000 annually. Biogen CEO Michel Vounatsos promised that the ‘fair’ price would not hike in the next 4 years.
The therapy provides hope to many, especially the Alzheimer’s patient community. It is also expected to generate billions of dollars in revenue for Biogen, which it plans to channel into drug studies for other diseases.
Biogen’s Alzheimer’s treatment has been long-awaited since 2016. This is because over 6 million Americans live with Alzheimer’s, and this number will more than double by 2050, according to estimates from the Alzheimer’s Association. Additionally, the disease has a high mortality rate – 37 deaths per 100,000 US population as of 2019.
Biogen (BIIB) Shares and Fundamental Aspects
In early 2019, an independent group noted the drug’s futility following data analysis. However, several months later, Biogen announced seeking FDA approval for the drug. Its scientists said that research on a larger dataset showed that the drug actually “reduced clinical decline in patients with early Alzheimer’s disease.”
Later that year, the FDA expressed optimism in the drug’s action and safety. Two days later, an independent panel of advisory experts failed to endorse the drug citing unconvincing data and an “overly positive view” from the FDA.
The mixed data has caused skepticism on the drug among Alzheimer’s experts and Wall Street analysts despite positive views from the drug’s supporters. Approval was provided on the condition that Biogen conducts an additional clinical trial to understand the drug’s full ramifications. The FDA will also continuously monitor the drug as it reaches the US market.
Regardless of the heated debates on the drug’s efficacy, Biogen (BIIB) stock has taken an uptrend, with the latest gain being the 4th in a row of gains in the past week. It has also set a new 52-week record high of $468.55, way higher than the previous $363.92. Additionally, its trading volume of 17.8M transcended its 50-day average of 1.0M. It also outdid competitors such as Johnson & Johnson (NYSE: JNJ) which fell 0.68% to $164.84.