Roche said its experimental Alzheimer's treatment failed in two final-phase tests, leading Biogen stock to surge while others crumbled.
The company tested its MorphoSys-partnered gantenerumab in patients with early Alzheimer's disease. Researchers found the experimental drug removed less beta amyloid than expected. Beta amyloid is an abnormal protein that builds up in the brains of Alzheimer's patients.
Patients who received the potential Alzheimer's treatment had a slower decline in cognition than placebo recipients, but the results weren't statistically significant. Their declines were roughly 6% to 8% slower than the placebo group, Roche said in a news release.
The results split the Alzheimer's treatment market on Wall Street.
On the stock market today, Biogen stock jumped 3.3% to 299.06. Shares of Eli Lilly advanced 1.4% to 356.06. Prothena stock jumped 46.9% to 60.82. Roche tumbled 4.6% to 41.27, but MorphoSys stock collapsed 27.8% to 3.94.
Biogen Stock: One Less Competitor
For Biogen, analysts see Roche's failure as a triple boon.
Biogen is working with Eisai on an Alzheimer's treatment called lecanemab. Lecanemab also removes beta amyloid and, in Phase 3 testing, recipients showed a 27% slower decline in cognition vs. the placebo group. The results sent Biogen stock skyward.
Now, with Roche's failure, Biogen is seeing one less potential competitor in the Alzheimer's treatment landscape. Eli Lilly is working on another late-stage effort to treat Alzheimer's disease called donanemab.
Importantly, Roche's gantenerumab failed to reach statistical significance, but it did remove the offending protein and led to slower cognitive decline. This lends credence to the oft-debated beta amyloid thesis of Alzheimer's disease. Many experts don't agree that removing it is the key to Alzheimer's treatment.
"The fact that gantenerumab showed any directional signals of activity reaffirms that beta-amyloid antibodies are active, and should eliminate any residual concerns that lecanemab's success was a fluke — rather, lecanemab just looks to be a better antibody," RBC Capital Markets analyst Brian Abrahams said in a report. He has an outperform rating on Biogen stock.
Lastly, Roche was testing gantenerumab as a shot. In comparison, drugs from Biogen and Lilly require intravenous infusion. This creates something of a bottleneck for patients as there must be enough centers to give IV treatments.
Alzheimer's Treatment From Prothena
Prothena followed Biogen stock's suit. Like Roche, Prothena is testing an amyloid-targeting shot. Notably, Biogen and Eisai are also working on an injected version of lecanemab. But their first bid for approval will be the IV formula.
RBC's Abrahams argues that Roche's failure doesn't mean Prothena is doomed to follow in its footsteps.
Gantenerumab dosing was slowly increased over time — a practice called titrating — to limit the potential of a side effect known as amyloid-related imaging abnormalities, or ARIA. ARIA is a form of swelling in the brain and it's common in response to amyloid-focused drugs. One-quarter of Roche's patients had ARIA. The company said the "vast majority" of cases were asymptomatic and very few quit treatment.
Titrating gantenerumab over time "may have prevented the potential for rapid (beta amyloid) plaque clearance, and from a profile standpoint (Prothena's drug) is significantly more potent," he said.
He kept his sector perform rating on Prothena stock.
Follow Allison Gatlin on Twitter at @IBD_AGatlin.
