The world may have been fighting COVID-19 in 2020, but there has been a multi-decade fight against Alzheimer’s disease. The loss of memory and cognitive function has affected most families in some form or fashion, and millions of Americans either have or are expected to develop certain stages dementia and Alzheimer’s.

Last week was a wild ride up for Biogen Inc. (NASDAQ: BIIB) after U.S. Food and Drug Administration internal notes were released. It looked as though the FDA panel advisory committee would recommend aducanumab as a treatment for at least part of the Alzheimer’s patient population. Any win would have been expected to have resulted in mega-blockbuster drug status. However, the advisory committee recommended against future FDA approval.

While the FDA approval is not dependent on the advisory committee’s recommendations, the bias toward non-approval was very high. The FDA’s Peripheral and Central Nervous System committee counted only one “yes” vote, followed by eight “no” and two “uncertain” votes regarding the question “Does Study 302 (EMERGE), viewed independently and without regard for Study 301 (ENGAGE), provide strong evidence that supports the effectiveness of aducanumab for the treatment of Alzheimer’s disease?”

The advisory committee also had no “yes” votes, seven “no” votes and four “uncertain” votes pertaining to evidence of the effectiveness. For the point about strong evidence of a pharmacodynamic effect, the committee showed five “yes” votes, followed by zero “no” votes and six “uncertain” votes. The last question, whether it is reasonable to consider its 302 study as primary evidence of effectiveness for the treatment of Alzheimer’s, the FDA’s committee gave no “yes” votes, 10 “no” votes and one “uncertain” vote.

Again, the move last week was expected to be followed by positive votes on Friday. Its shares went from $247 or so up to over $355 in a single trading day. And after a $328.90 close last week ahead of the committee report, now its shares were down closer to $233 on Monday.

24/7 Wall St. has tracked multiple analyst calls regarding the expected approval or nonapproval of aducanumab as the first viable treatment against Alzheimer’s disease. Some analysts actually still see a path to approval, and if so there could be a huge reward for those who stick with it. The flip side is that most analysts now have downgraded their expectations, and they have handily cut their own price targets and expectations.

BofA Securities downgraded Biogen to Underperform from Neutral and slashed its price objective to $240 from $360.

Cowen downgraded it to Market Perform from Outperform, and the firm has a mere $215 price target.

Atlantic Equities downgraded it to Underweight from Neutral with an even worse $175 price target.

Canaccord Genuity still has its Buy rating, and analyst Sumant Kulkarni has a $393 price target. The firm’s view is that the outcome clearly placed Biogen and the FDA between a rock and a hard place. With an FDA action date of “buy March 7, 2021,” for approval or nonapproval, the ball is now considered to be firmly in the FDA’s court. The firm also believes that there is still a potential path forward and that a fallback on biomarkers/surrogate endpoints supports approval with commitments to conduct post-approval trials.

Other firms have maintained their ratings but trimmed their target prices based on the new information:

• Oppenheimer has an Outperform rating but cut its price target to $300 from $370.
• H.C. Wainwright has a Buy rating but trimmed its price target from $318 to $289.
• RBC Capital Markets has a Sector Perform rating but cut its $263 target price to $244.

Citigroup has a Sell rating and a $200 price target. The firm notes that the panel recommendations and criticisms now make it hard for the FDA to vote for formal approval heading into or after the start of 2021.

Biogen stock was traded down more than $96.00 (−29.25%) at $232.00 late Monday morning. Its 52-week range is $223.25 to $374.99.

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