Biotechnology is a market that almost never goes cold. There is always investment capital to be found and substantial reward for innovations that pay off.
Whether it is in cancer treatment, or biologics that amplify the body’s ability to heal itself, the next big breakthrough always seems like it is just around the corner. That is absolutely the case with Alzheimer’s disease research. The debilitating effects and the overall prevalence make this an area where a lot of the best and brightest are hard at work.
Biogen, Inc. has worked in Alzheimer’s before, but now appears to have the best chance of getting FDA approval for a treatment, when compared to its rivals. Top ratings companies have upgraded their view of the stock from buy to hold as the company prepares to navigate the regulatory obstacle course to get approval for its aducanumab medication. Although there is some analyst skepticism regarding the drug, this is surprisingly not seen as a major impediment to FDA approval. Also, market watchers feel that the value of potential approval is not yet incorporated into the Biogen stock price.
Obviously, there is no guarantee that the approval will go through, but the upside for any Alzheimer’s treatment is tremendous. Analysts have determined that Biogen is in the best position to get approval, despite the usual patent challenge and other pitfalls that accompany drug development. One report indicated that FOMO (fear of missing out) will contribute to an elevated stock price as more investors try to get on board early. Industry experts see indications that the FDA is now anxious to approve something, which means starting a lengthy bureaucratic process. Among other things, this will consist of Advisory Committee meetings, votes and finally an FDA action date.
Whoever wins the race to approval for aducanumab stands to gain quite a prize. The projected unit cost will be $8,700, with a discount in the EU and Japan. The result could be as much as $9.9 billion in revenue per year by 2030. This high stakes game could lead to some volatility with Biogen stock, and billion plus dollar losses have been documented in this space.
Medical literature indicates that the number of reported cases of Alzheimer’s continues to increase. New treatments could reverse this trend and we are now closer to an approved medication than ever before.