Biogen reopens following FDA approval of company's Alzheimer drug

CNBC's Meg Tirrell discusses the surge in shares of Biogen after the FDA gave the ok to the company's Alzheimer's drug. For access to live and exclusive video from CNBC subscribe to CNBC PRO: https://cnb.cx/2NGeIvi

The Food and Drug Administration on Monday approved Biogen’s Alzheimer’s disease drug aducanumab, making it the first medication cleared by U.S. regulators to slow cognitive decline in people living with Alzheimer’s and the first new medicine for the disease in nearly two decades.

The FDA’s decision was highly anticipated. The drug, which is marketed under the name Aduhelm, is also expected to generate billions of dollars in revenue for the company and offers new hope to friends and families of patients living with the disease.

Biogen’s stock was halted for the announcement. The shares later resumed trading, surging more than 60% at one point, before paring that gain and closing up 38% at $395.85.

“We are well-aware of the attention surrounding this approval,” Dr. Patrizia Cavazzoni, director of the FDA’s Center for Drug Evaluation and Research, said in a press release. “We understand that Aduhelm has garnered the attention of the press, the Alzheimer’s patient community, our elected officials, and other interested stakeholders.”

“With a treatment for a serious, life-threatening disease in the balance, it makes sense that so many people were following the outcome of this review,” Cavazzoni added.

The FDA said it will continue to monitor the drug as it reaches the U.S. market. The agency granted approval on the condition that Biogen conduct another clinical trial. The Massachusetts-based biotechnology company said Monday that aducanumab’s list price is $56,000 per year; $4,312 per infusion.

Biogen CEO Michel Vounatsos told CNBC’s “Power Lunch” later Monday that he thought the drug’s price was “fair” but also vowed that the company would not hike its price for four years.

It is a reflection of “two decades of no innovation” and will also allow the company to further invest in its pipeline of drugs for other diseases, he said.

Alzheimer’s disease is a progressive neurodegenerative disorder that slowly destroys memory and thinking skills. More than 6 million Americans are living with it, according to estimates by the Alzheimer’s Association. By 2050, that number is projected to rise to nearly 13 million, according to the group.

“It is a new day,” Harry Johns, CEO of the Alzheimer’s Association, said in a statement. “This approval allows people living with Alzheimer’s more time to live better. For families it means being able to hold on to their loved ones longer. It is about reinvigorating scientists and companies in the fight against this scourge of a disease. It is about hope.”

There were previously no drugs cleared by the FDA that can slow the mental decline from Alzheimer’s, which is the sixth-leading cause of death in the United States. The agency has approved Alzheimer’s drugs aimed at helping symptoms, not actually slowing the disease itself.

Federal regulators have faced intense pressure from friends and family members of Alzheimer’s patients asking to fast-track aducanumab, but the road to regulatory approval has been a controversial one since it showed promise in 2016.

In March 2019, Biogen pulled development of the drug after an analysis from an independent group revealed it was unlikely to work. The company then shocked investors several months later by announcing it would seek regulatory approval for the drug after all.

Shares of Biogen soared in November after it won backing from FDA staff, who said the company showed highly “persuasive” evidence aducanumab was effective and that it had “an acceptable safety profile that would support use in individuals with Alzheimer’s disease.”

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