Eli Lilly Sola Failure is a 'Serious Blow' to Biogen (BIIB) and Others in AD Field - Leerink

November 23, 2016 7:57 AM EST
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Leerink Partners analyst Geoffrey Porges weighed in on Biogen (NASDAQ: BIIB) after Eli Lilly (NYSE: LLY) announced that the solanezumab (sola) phase III trial in patients with mild Alzheimer’s disease failed to meet statistical significance on the primary endpoint and only showed modest trends on the secondary endpoints.

Porges said for Biogen and other companies in the Alzheimer’s field, this is a serious blow.

"We expect Biogen’s stock to be down materially today, and estimate that if 100% of the value of aducanumab was removed from Biogen’s valuation in our model, the stock would be reduced in value by $37, or ~10%," he commented. "If the probability of success of aducanumab is reduced to 35% (from the 65% today in our model) then the change in stock price will be $8, or ~3%."

"Biogen’s phase Ib trial showed more robust effects than any trial with solanezumab, and the phase III trial has a different patient population (milder disease), more rigorous confirmation of amyloid and uses a much higher dose of antibody and different endpoints," he added.

"We believe investors will not completely discount the value of aducanumab, at least after the CtaD presentations and discussions. For our own part, we will evaluate our model and probability of success and consider whether we should adjust our valuation as well."



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