Biogen stock popped Tuesday after the company's partner, Eisai, finished submitting its application for an experimental Alzheimer's treatment.
The drug, lecanemab, uses the same mechanism as Biogen's controversial treatment, Aduhelm, tamping down on abnormal protein called amyloid in the brain of Alzheimer's patients. But Biogen hasn't proven the mechanism leads to a benefit on cognition, and Medicare recently restricted Aduhelm's coverage. Biogen stock has dropped since.
Lecanemab could be Biogen's second bite at the anti-amyloid apple.
The companies are seeking an accelerated approval for lecanemab. This would allow the Food and Drug Administration to approve lecanemab based on its potential to remove amyloid. Tokyo-based Eisai would still need to prove that leads to a benefit on cognition.
On today's stock market, Biogen stock jumped 4% to 195. Eisai climbed 3.3% to 42.70, according to CNBC.
Biogen Stock: Potentially Transformative Effort
RBC Capital Markets analyst Brian Abrahams says Biogen stock — and several other biotech stocks — are at a compelling entry point. Investors have zeroed out expectations for Biogen's Alzheimer's assets.
This makes "lecanemab data potentially transformative to the upside and with limited fundamental downside," he said in a note to clients. Abrahams has an outperform rating on Biogen stock. Eisai plans to unveil the results of the Phase 3 study of 1,795 patients in the fall.
That study, called Clarity AD, could be a confirmatory study needed for accelerated approval. Or, Eisai says it could ask for full FDA approval, dependent on the study's results.
Biogen stock fell definitively below its 50-day moving average earlier this month, according to MarketSmith.com.
Follow Allison Gatlin on Twitter at @IBD_AGatlin.
