Biotechnology stocks and sector-related exchange traded funds stood out Friday after regulators breathed new life into Biogen (NasdaqGS: BIIB) and its partner Eisai Co. (ESALY) on a new Alzheimer’s drug candidate.
Among the top performing non-leveraged ETFs of Friday, the VanEck Vectors Biotech ETF (BBH) rose 2.1% and iShares Nasdaq Biotechnology ETF (IBB) gained 0.6%.
Meanwhile, Biogen shares jumped 6.0%. BIIB makes up 5.0% of BBH’s underlying portfolio and 3.3% of IBB.
The U.S. Food and Drug Administration approved an additional three months of review of Biogen’s Alzheimer’s drug and will make a decision on the potential blockbuster drug, aducanumab, on June 7, the Wall Street Journal reports.
If aducanumab is approved, the company could have developed one of the bestselling drugs in the world, adding years of potential revenue and profit growth. However, if rejected, Biogen will have to make do with a number of aging multiple-sclerosis drugs that show declining revenue.
Biogen said it submitted additional analyses and clinical data to the FDA for a request for more information, which added to the the prolonged review time.
“We are committed to working with the FDA as it completes its review of the aducanumab application,” Biogen Chief Executive Michel Vounatsos said.
Biogen shares previously skyrocketed and then plummeted in November after an independent committee of outside experts voted that even the best available clinical data didn’t deem the drug effective.
The drug maker previously halted two late studies of the Alzheimer’s drug after finding it was statistically unlikely to provide benefits over a placebo. However, it resurrected the drug several months later and pushed for approval after analyzing new data from the discontinued trials that showed a slowing cognitive decline compared to placebos in one trial.
Over five million Americans suffer from Alzheimer’s disease, and Steven Miller, chief clinical officer at health-insurer Cigna Corp., said 1.2 million to 1.4 million could be eligible to take aducanumab since they exhibit mild cognitive impairment and abnormally high amyloid levels.
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