Eisai Co.’s Chocola BB Plus vitamin B2 preparation container and tablets are arranged for a photograph in Tokyo, Japan. (Photographer: Kiyoshi Ota/Bloomberg)

Biogen’s Alzheimer’s Drug Data Encouraging, Not ‘Shock and Awe’

(Bloomberg) -- Eisai Co.’s market value plunged by $2.7 billion Thursday as investors were disappointed with test results for an experimental Alzheimer’s disease drug from the Japanese company and Biogen Inc.

Results showing the treatment slowed progression of the disease by 30 percent fell short of expectations that had sent Eisai soaring earlier this month after it announced initial test results showing promise for the drug. After the data was released Wednesday, doctors and patient advocates said more information was needed from larger, longer studies.

Eisai stock fell 10 percent Thursday in Tokyo, after plunging as much as 21 percent earlier in the day. Biogen sank 11 percent in late trading Wednesday in New York after closing at the highest in three years in anticipation of the results. BioArctic AB, the Swedish company that originally developed the medicine, tumbled in Stockholm trading.

Biogen’s Alzheimer’s Drug Data Encouraging, Not ‘Shock and Awe’

The results showed only the highest dose worked. And while the percentage benefit exceeded analysts’ expectations, the new data was for patients treated for 18 months rather than the 12 months many had anticipated -- which muddled comparisons.

The trial itself has been shrouded in secrecy. After an initial analysis using a novel approach failed to find a significant improvement in December, the companies announced three weeks ago that a different approach yielded positive results.

“It’s encouraging, but a lot more needs to be done,” said Julie Schneider, associate director of Rush Alzheimer’s Disease Center in Chicago, and one of the few outside experts who had seen the latest data released Wednesday. “I would not say it’s shock and awe.”

Eisai executives were undeterred by the drop in investor confidence. The company is preparing to file for conditional approval for the drug as it readies for the next phase of the study, said Masanori Tsuno, Eisai’s deputy chief clinical officer of its neurology unit, at a briefing Thursday in Tokyo.

“There are many different options for the next stage that we have been discussing,” he said. “Based on this data, the health authorities may want to consider conditional approval. We can then get applicant commitments for additional studies. There are industry examples of this happening in the U.S., Europe and Japan.”

The results for the drug, called BAN2401, were first presented at the Alzheimer’s Association International Conference in Chicago. Shares of Biogen, based in Cambridge, Massachusetts, Eisai and BioArctic soared earlier this month after the companies presented the initial positive results on July 5.

Highest Dose

Only the highest of five doses of the drug showed a significant benefit, slowing the progression of the disease on a novel measure called ADCOMS of 12 items compiled from more traditional approaches. It included performance on word recognition and recall, personal care, memory, problem solving and drawing.

The highest dose of the drug also had a significant benefit on a traditional test of mental function called ADAS-Cog, reducing the cognitive decline by 47 percent compared with placebo. None of the other doses of the drug were successful.

“It hints at some cognitive effect,” said Maria Carrillo, chief science officer at the Alzheimer’s Association. “We would like to see a larger, more confirmatory trial.”

Concerns on Findings

Analysts raised questions about other nuances in the findings.

Patients given the highest dose were the least likely to have a genetic predisposition to the disease, which can mean faster progression. The imbalance occurred because European regulators didn’t want them to be exposed to so much medication. In previous studies, people with the genetic mutation known as APOE4 were the most at risk for potentially harmful swelling in the brain.

As a result, patients who would have been assigned to the high dose instead were sent into a lower dose or a placebo treatment. In the study, 71 percent of placebo patients were APOE4 positive, versus 30 percent of those given the highest dose. The fact that there were fewer people predisposed to worsening faster may have been responsible for the benefit, not the potency of the treatment, some analysts said.

The history of Alzheimer’s research has been marked by a series of high hopes and dramatic setbacks. There have been about 200 failed attempts to find a treatment -- so far in vain. The stakes are enormous for the pharmaceutical industry, as well as the millions of people grappling with the disease around the world. A successful drug to slow the progression would be a first in the space, with stratospheric sales and few rivals currently on the horizon.

BioArctic would receive royalties on sales if BAN2401 gets approved.The shares plummeted as much as 59 percent when trading began Thursday after the disappointing trial results, in the company’s biggest fall since its IPO in October. The stock dropped 19 percent to 122 kronor at noon in Stockholm, valuing the company at 10.7 billion kronor ($1.2 billion).

The drug, which targets a protein called amyloid, thought to be a cause of the disease, is in mid-stage trial, known as phase 2, and would need to go through final stages of study, or phase 3. Many of the previous failures happened in phase 2, and doctors welcomed any hint of progress in treating the disease that has become the sixth largest killer in the U.S.

“The field needs a shot in the arm right now in terms of enthusiasm because there have been so many failed phase 3 big trials,” Ronald Petersen, director of the Mayo Clinic Alzheimer’s Disease Research Center. “It certainly is encouraging that maybe this line of investigation is going to pay off when the right participants are enrolled in the study at the right phase in the disease.”

To Sharon Cohen, medical director of the Toronto Memory Program, the results were “very exciting.”

“We are seeing without any doubt a meaningful clinical slowing of disease,” she said. “We need this.”

Investors may have priced in too much hope, too soon.

“The enthusiasm built up around this data set was ridiculous,” Brian Skorney, an analyst at Baird Equity Research, said in a note Wednesday night. “It is neither the savior nor destroyer of the amyloid hypothesis. We expect a sell-off tomorrow as the irrational exuberance burns off, but would be looking for an opportunity to be buyers if it goes too far."

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