Biogen (NASDAQ:BIIB) shares tumbled on Thursday after the big biotech announced disappointing sales of its Alzheimer’s drug.
Biogen said Thursday after market close that sales of its Alzheimer’s drug aducanumab fell short of expectations, which came as a surprise to investors.
Biogen said in a statement that aducanumab generated net sales of $271 million in the second quarter, about half of what the company was expecting. That’s not what the market was looking for, either. Shares tumbled more than 15 percent in after-hours trading following the announcement.
Amyotrophic lateral sclerosis, or ALS, was once thought to be fatal and was a leading cause of death among the elderly, however as treatments become more advanced and accessible, the disease is now much less common.
While ALS has a host of different causes, most researchers agree that it is caused by a poorly understood part of the brain. As part of its quest to find a cure for the disease, researchers at Biogen have focused on trying to find what’s causing it.
Biogen’s aducanumab is an antibody that binds to a protein known as amyloid beta, which is an important component of the protein that was thought to cause ALS. Biogen developed the drug in hopes of helping many more people with the disease.
The drug was put into a Phase III trial in September 2014 and Biogen said that this summer it filed for a permit to seek approval of the drug. Analysts had also been looking for promising signs for the drug, given that it was Biogen’s most advanced Alzheimer’s treatment to date.
“The once hoped-for blockbuster that had captivated investors and the research community has now been relegated to a niche treatment, suggesting investors may need to rethink expectations,” Peter Lawson, an analyst with National Australia Bank, said in a research note.
In an earlier January research note, RBC Capital Markets analyst Randall Stanicky had predicted “in excess of $1 billion” in sales for the drug. For the first quarter of this year, he had put the sales figure at $312 million.
Biogen did not say why aducanumab sales fell short of expectations.
Although aducanumab is a first-in-class medicine that Biogen and others have hoped could provide an effective treatment for Alzheimer’s, Alzheimer’s is a disorder that affects about 5 million people in the U.S. As many as three-quarters of patients with Alzheimer’s will not develop dementia within 10 years after being diagnosed, however, meaning that many people are likely to continue to have memory loss and other effects of the disease.
Researchers still are trying to figure out what causes the disease, but say that there are a few things that may play a role.
One is genetics, which accounts for about one in 10 cases. Drugs were developed that attempted to remove some of the amyloid beta protein but those treatments have not worked to a large degree. Another important element is what researchers call behavioral characteristics, which are characterized by changes in behavior, agitation, emotional changes and memory problems.