What happened
Biogen (NASDAQ: BIIB) , a leader in the treatment of neurological and neurodegenerative diseases, saw its shares sink by a noteworthy 16.5% last month, according to S&P Global Market Intelligence .
The culprit? Biogen's shares slumped in Feb. in part because of the downturn across the broader markets. However, the main reason was a key change to the company's ongoing Alzheimer's disease trial for the monoclonal antibody aducanumab.
So what
In a presentation to investors on Feb. 14, Biogen's chief medical officer, Alfred Sandrock, revealed that the company was planning to enroll an additional 510 patients in the ongoing pivotal stage trial. Sandrock said the change was needed due to " greater-than-expected variability on the primary endpoint." Although the option to expand the trial was already planned, investors appear to be concerned that aducanumab may not be performing as expected in the clinic.
Now what
Unfortunately, Biogen doesn't have a particularly strong pipeline outside of aducanumab, which is somewhat surprising given the 99% failure rate for clinical-stage Alzheimer's disease drugs over the past twenty odd years. In fact, Merck just threw in the towel on its BACE1 inhibitor, verubecestat, as a potential treatment for Alzheimer's disease, and pharma giant Pfizer decided to shutter its Alzheimer's disease research unit altogether earlier this year due to this painfully high failure rate.
The point is that Biogen needs to make a big splash on the M&A scene soon in the likely event that aducanumab does miss the mark. This experimental Alzheimer's disease drug, after all, has always been an extreme long-shot. Complicating matters further, the company is staring down a number of novel competitive threats to its core multiple sclerosis franchise -- putting even more pressure on the biotech to pursue a bolt-on acquisition sooner rather than later.
10 stocks we like better than Biogen
When investing geniuses David and Tom Gardner have a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor , has tripled the market.*
David and Tom just revealed what they believe are the 10 best stocks for investors to buy right now... and Biogen wasn't one of them! That's right -- they think these 10 stocks are even better buys.
Click here to learn about these picks!
*Stock Advisor returns as of March 5, 2018
George Budwell owns shares of Pfizer. The Motley Fool recommends Biogen. The Motley Fool has a disclosure policy .
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
