The lucrative Alzheimer’s disease market moves a step closer to have a potential treatment approved in the United States after witnessing years of failures.

Biogen Inc. BIIB and its Japan-based partner Eisaiannounced that the FDA gas granted priority review to its biologics license application (BLA) seeking approval of aducanumab, its controversial investigational treatment for Alzheimer’s disease.

The priority review status accelerated FDA’s review timeline to six months from acceptance of the BLA instead of the standard 10 months. With the FDA granting priority review to the BLA, a decision is expected on Mar 7, 2021. Importantly, Biogen did not use its priority review voucher (PRV), which was granted at the time of approval of its spinal muscular atrophy (SMA) drug, Spinraza. The FDA’s granting of priority review to the BLA without using the PRV is an encouraging sign. However, the FDA plans to hold an Advisory Committee meeting for the BLA.

The BLA filing includes data from the ENGAGE and EMERGE phase III studiesas well as the phase Ib PRIME study in patients with early-stage Alzheimer’s disease.

Biogen’s shares were up 10.1% on Friday as earning a priority review tag for the BLA is a positive. Biogen’s shares have risen 3.3% compared with the industry’s increase of 5.3% in the same time frame.

In March 2019, Biogen and Eisai had announced the discontinuation of ENGAGE and EMERGE studies as a futility analysis showed that these were unlikely to meet their primary endpoints. In October 2019, surprisingly, Biogen revealed plans to pursue U.S. regulatory approval of aducanumab based on positive results of a new analysis of larger dataset, which became available after the discontinuation of the studies.

The new analysis of the larger dataset showed a different outcome than the one predicted at the time of the futility analysis. The EMERGE study met the primary endpoint, showing that patients treated with a high dose (10mg/kg) of aducanumab experienced a statistically significant reduction in clinical decline of Alzheimer’s disease. The ENGAGE study, however, did not meet the primary endpoint. However, Biogen said that data from a subset of patients in the ENGAGE study who received higher dose of aducanumab supported the findings from the EMERGE study. Biogen completed the BLA filing in July.

Alzheimer’s Market has Significant Potential

Alzheimer’s, a fatal condition that causes progressive decline in memory, has always been a highly challenging area, and not much progress has been made despite significant investments (both funds and resources). The drugs presently available just treat the symptoms of the disease. Several companies have failed to develop safe and effective treatment options to treat this deadly brain disease. Other than Biogen, several large pharma companies, including Roche RHHBY, Amgen AMGN, Novartis NVS, Merck, Pfizer, Lilly and AstraZeneca stopped development of their AD candidates in the last few years either due to low possibility of success or safety concerns.

Despite the setbacks, the companies continue to invest heavily in developing AD treatments, given the high commercial potential in this market. Success in this area means huge returns. This is because more than 5 million Americans are living with AD with the numbers are expected to triple by 2050 (Data: Alzheimer’s Association). The market has immense commercial potential and companies coming out with new treatments could rake in billions of dollars in sales.

No doubt, Biogen has left no stone unturned to resurrect aducanumab because if it is approved by the FDA, it will become the first medicine to be approved to reduce the clinical decline associated with this devastating disease. It will also be the first medicine to show that removing amyloid beta (plaque in the brain) results in better clinical outcomes in Alzheimer’s patients. It will bring in huge revenues for Biogen by meaningfully changing the course of Alzheimer’s treatment.

However, a group of analysts believe that the FDA may not approve aducanumab, particularly with mixed outcome results across the two studies. Also, the FDA may require additional studies to be conducted to confirm the candidate’s benefits. The advisory committee meeting will be the key catalyst for Biogen’s stock.

Biogen currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here

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