Analyst Looks Beyond Biogen Inc (BIIB) Phase 2 Failure; Here’s Why the Drug Maker’s Second Alzheimer’s Asset Could Fare Differently Than BAN2401

Mizuho's Salim Syed highlights 24% upside potential for BIIB shares, noting most investors were bracing themselves for this Phase II failure.


Biogen Inc (NASDAQ:BIIB) shares are slipping nearly 3% in market trading today after the company revealed its Phase 2 trial collaboration with Eisai in Alzheimer’s came up short of realizing the primary endpoint. However, was this failure anticipated?

Mizuho analyst Salim Syed says yes, noting that considering the trial “was never stopped at any of the interim analyses and Eisai recently opted into BIIB’s Aducanumab,” this is no grand surprise to most investors. For this reason, though the stock has lost 3% in value, this is still a “a fairly muted” reaction, one in the “low single digit % decline” that the analyst predicted.

Both Syed and the Street had already been “carrying minimal risk-adjusted sales for this asset in the BIIB model. For the analyst, what matters more “is that there should be no read-across to BIIB’s Phase 3 Aducanumab trial.”

First, the analyst draws one important distinction: “BAN2401 and Aducanumab are not the same antibody. While both antibodies target beta-amyloid protein, they do so differently […] Throughout the last several years, we have seen data from other beta-amyloid drugs, and if there is anything that we have learned is that small differences in these antibodies can lead to differences in their efficacy / safety profiles.”

Second, keep in mind that the drug that failed the Phase 2 trial is not using the same clinical trial endpoint as Aducanumab. Whereas the BAN2401 study utilized ADCOMS, the analyst notes Aducanumab’s Phase 3 studies use CDR-SB. “ADCOMS is ~60% CDR-SB, so while the measures are related, there is still about 40% of the measure that is not,” Syed writes.

Third, these two drugs are not measured by the same time points, as the trial that failed was set at a measurement of 12 months. In comparison, Aducanumab’s clinical studies will use an 18 month-marker measurement. The analyst adds, “Importantly, the BAN2401 trial will remain blinded per predefined study protocol and a final analysis will be performed at 18 months using both ADCOMS as well as CDRSB,” with a data read-out anticipated by the back half of the new year.

Fourth, the MMSE entry criteria being used is not entirely alike, as though both trials enrolled early-stage Alzheimer’s patients, Aducanumab’s Phase 3 trials will notably enroll patients with “slightly milder” MMSE scores, which Syed surmises “is good for Aducanumab.”

As such, despite BAN2401’s Phase 2 miss, the analyst maintains a Buy rating on BIIB stock with a $400 price target, which implies a close to 24% upside from current levels. (To watch Syed’s track record, click here)

TipRanks shows a cautiously optimistic Street surveying this biotech player, with 14 out of 20 analysts polled in the last 3 months rating a Buy on BIIB stock and 6 maintaining a Hold. The 12-month average price target stands at $359.17, marking an 11% upside from where the stock is currently trading.