Why Biogen’s Alzheimer’s Treatment Results Sent Its Rival Crashing 15%

Biogen (BIIB) stock tumbled Thursday — pulling shares of rival Prothena (PRTA) into a steep dive — after an updated version of Alzheimer’s treatment Leqembi unexpectedly resulted in brain swelling.

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Biogen and partner Eisai (OTC: ESAIY) make a twice-weekly infusion called Leqembi for Alzheimer’s treatment. But not every patient lives within driving distance of an infusion center. So, the companies are hoping to eventually gain approval for an under-the-skin shot that could be given at home.

Test results so far have been a “mixed bag,” Piper Sandler analyst Christopher Raymond said in a note to clients. Leqembi works by removing abnormal plaque in the brain called amyloid. After six months of treatment, the under-the-skin shot — also called subcutaneous — led to a 16% lower level of amyloid than the infusion.

But it also led to an unexpected increase in amyloid-related imaging abnormalities, or ARIA, a type of swelling in the brain that can be fatal in some patients. Prothena is working on a similar approach with an amyloid-targeting under-the-skin shot.

In afternoon trading on the stock market today, Biogen stock fell 1.8% near 242.40. Shares of partner Eisai, on the other hand, rose 1.6% near 13.70. Prothena shares crashed 15% near 33.70.

Biogen Stock Drags Prothena Down

The news is having a greater impact on Prothena because the company has many experimental drugs, but nothing approved. Biogen and Eisai have numerous approved products with the under-the-skin shot of Leqembi being just another potential sales contributor.

RBC Capital Markets analyst Brian Abrahams says the results affirm the viability of an under-the-skin injection in Alzheimer’s treatment.

But “the slightly higher (ARIA) observed with subcutaneous Leqembi vs. infusion also shows that there may not be definitive separability between plaque-reducing activity of beta-amyloid antibodies and ARIA side effects,” he said in a report.

Prothena has been shooting for its injection to remove 44% of the amyloid in patients’ brains and that less than 24% will experience brain swelling.

“Prothena may have a higher bar to clear in order to suggest a potential therapeutic advantage (beyond its potentially more convenient monthly dosing),” Abrahams said.

He kept his outperform ratings on Prothena stock and Biogen stock.

Follow Allison Gatlin on X, the platform formerly known as Twitter, at @IBD_AGatlin.

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