Biogen’s Alzheimer’s Drug Flop Could Wipe Out a Third of Value

(Bloomberg) -- Biogen Inc. and partner Eisai Co’s decision to stop late-stage studies of their Alzheimer’s disease drug aducanumab could wipe out about 30 percent of the drugmaker’s value, according to Mizuho analyst Salim Syed.

A failed futility analysis for the potential blockbuster would “likely send the stock down to around ~$225-250 / share level,” Syed wrote in a note to clients earlier this month. Excluding all drugs in the pipeline would leave the stock valued around $215 a share, he said. The Cambridge, Massachusetts-based company closed at $320.59 on Wednesday.

Shares are currently halted in trading before the U.S. market open and are slated to resume trading at 7:30 a.m. in New York.

The company will likely need to step up its deal flow after the drug failure to replenish a stagnant pipeline. Biogen announced plans to buy gene therapy developer Nightstar Therapeutics Plc for $877 million on March 4.

To contact the reporter on this story: Bailey Lipschultz in New York at blipschultz@bloomberg.net

To contact the editor responsible for this story: Catherine Larkin at clarkin4@bloomberg.net

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