There are few diseases as cruel as Alzheimer's. I watched my mother deteriorate from it for years before she passed away from its ravages.
Many others have had this experience so it was uplifting to see the headlines this morning that Biogen (BIIB) and partner Eisai (ESALY) have announced positive Phase II results for a drug that treats Alzheimer's at an early stage.
Eisai's Chief Clinical Officer Lynn Kramer, M.D. stated, "This is the first late-stage anti-amyloid antibody study to successfully achieve statistically significant results at 18 months, further validating the amyloid hypothesis."
The study of 856 patients bodes well for the drug called BAN2401 but there is much more work to be done to bring the drug to fruition. Full details of the study will be announced at the Alzheimer's Association International Conference (AAIC) on July 22-26 or possibly at a later conference in October.
Despite the positive headlines there are issues in the study that are keeping some buyers cautious and causing selling into the early strength.
The two main issues are that the drug had failed in a prior study of 12-months duration. That has created some questions about why the 18-month period is showing different results. That brings up a second issue which is the measurement of cognitive improvement. Measuring stability of cognitive function over time is not an easy task and there will be some questions about the methodology employed.
The study shows the slowing progression of Alzheimer's but this is a far cry from a cure. The drug did have an impact but it will take years before we will know how positive this news will ultimately be.
Biogen is trading up about 16% or $48 on the news but is well under early levels that were $20 higher. Technically, the price action suggests further momentum after some profit taking and consolidation.
A good chart comparison is Sarepta Therapeutics (SRPT) which gapped up big on news in mid-June. The stock closed that day well off the intraday highs and has been consolidating for a few weeks now. It seems to have found support and there is accumulation as volume had dried up.
The SRPT niche is quite different than the BIIB situation but it does illustrate the risks of being too aggressive with chasing headlines that may overstate the situation.
I'll be looking to buy BIIB but I'm going to let the situation cool off a bit and see if it develops like SRPT has.
