Biogen Inc’s shares slumped about 30% on Monday as the drugmaker’s chances of getting a regulatory approval for its experiment Alzheimer’s treatment suffered a blow after a panel of experts to the U.S. Food and Drug Administration voted against the medicine.
Wall Street analysts largely believe the panel’s near-unanimous votes against the drug, aducanumab, make it difficult for the FDA to go against the panel.
“Approving aducanumab, in the face of such an overwhelmingly negative vote and commentary, is virtually impossible and would destroy the agency’s reputation at a very tenuous time for the regulator, ahead of potential actions on COVID vaccines,” Baird analyst Brian Skorney said.
The panel on Friday voted “no” to three questions related to whether a single successful large trial of the drug was enough evidence of its effectiveness, given the failure of a second large study.
The FDA is expected to make its decision on aducanumab by March and is not obligated to follow the recommendations of the panel, but usually does.
It is uncommon for the FDA to act against the committee, Jefferies analyst Michael Yee said, adding that it happens less than 20% of the time.
Bowing to pressure from patient advocates, the agency in 2016 approved a treatment for Duchenne muscular dystrophy from Sarepta Therapeutics Inc, even though an outside panel of experts and the agency’s own reviewers questioned the drug’s efficacy.
“The FDA can do what it wants,” Stifel analyst Paul Matteis said, adding that the vote against Sarepta’s Exondys 51 was obviously better than the 0-10-1 against aducanumab.
If approved, aducanumab would become the first new treatment for Alzheimer’s in decades and the first that appears to be able to slow progression of the fatal, mind-wasting condition, potentially bringing in billions of dollars in sales for Biogen.