Due to lingering concerns about inflation, interest rates, and the global financial system, Wall Street investors have been unsure about when the stock market will rebound. After trading slightly down earlier in the morning, futures contracts for the Dow Jones Industrial Average (DJI 1.88%), S&P 500 (GSPC 1.97%), and Nasdaq Composite (IXIC 2.05%) all made gains after seeing losses of as much as 1% in premarket trading.
On one side of the market, there was quite excellent news. While biotech companies have been among those hardest hit by the bear market in 2022, Biogen (BIIB 39.85%) recently published positive results from a crucial clinical trial that have significant ramifications for those with a severe and disabling disease. Eli Lilly (LLY 7.48%), a competitor in the same business, gained from Biogen’s positive outcome on the hope that new approaches to developing significant therapies will lead to other successes.
A breakthrough in Alzheimer’s is made by Biogen.
Biogen’s stock increased by more than 50%. The phase 3 research results of the biotech pioneer’s candidate therapy for treating Alzheimer’s disease were released, and both the medical field and shareholders responded favorably.
The lecanemab anti-amyloid beta protofibril antibody was tested in the 1,800-patient phase 3 confirmatory Clarity study by Biogen and trial partner Eisai. The results showed promise in individuals with mild cognitive impairment brought on by Alzheimer’s disease. The primary aim of the Biogen/Eisai treatment, which was to significantly lessen clinical deterioration on the worldwide functional and cognitive scale most frequently used to assess Alzheimer’s patients, was achieved. It also satisfied important secondary objectives, including as alterations in amyloid levels and enhancements in a number of other disease-related score measures.
The news supports the tactical change Biogen made following the controversy surrounding its Aduhelm Alzheimer’s medication called into doubt the efficacy of the treatment in treating the disease as a whole. Aduhelm was given FDA approval in 2021, however Medicare only allowed patients participating in authorized research trials to get coverage as Medicare awaited additional proof of Aduhelm’s efficacy. Lecanemab was developed by Biogen in an effort to more clearly illustrate the efficacy of the novel medication rather than relying solely on Aduhelm.
With the promising outcomes, Biogen and Eisai plan to submit a lecanemab FDA application in the first half of 2023. With more than 1 million eligible patients who potentially turn lecanemab into a multibillion-dollar blockbuster, stock analysts hurried to enhance their assessments of Biogen’s financial prospects.
Can Eli Lilly follow Biogen’s lead?
Eli Lilly saw a large increase in the price of its shares as well. Investors attempting to understand the second-order ramifications of the Biogen ruling drove the stock up 8%.
According to two stock analysts, Lilly will profit from the successful outcomes of the Biogen trial. Given that Lilly’s prospective Alzheimer’s medication donanemab aims to follow the same basic strategy as the Biogen treatment in attempting to lower amyloid levels in Alzheimer’s patients, Cantor Fitzgerald identified it as a potential winner. There is leeway for Lilly’s candidate to join the market if it proves to be equally beneficial, with lecanemab’s success potentially overcoming the pessimism regarding such treatments which the Aduhelm experience produced. Similar complimentary remarks about Lilly’s near-term stock price were made by Morgan Stanley
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