Why This Biogen Analyst Says The FDA Could Still Approve Aducanumab

Biogen Inc BIIB shares are retreating sharply after an Adcom committee recommended against approval of its investigational Alzheimer's drug aducanumab.

Despite the setback, an analyst at SVB Leerink said aducanumab could still successfully clear the final FDA hurdle.

The Biogen Analyst: Analyst Marc Goodman maintained an Outperform rating on Biogen and lowered the price target from $402 to $382.

The Biogen Thesis: A good chance exists that the FDA will approve aducanumab anyway, Goodman said in a note, naming four reasons why. 

First, SVB Leerink's key opinion leader commentary prepared the sell-side firm for a negative FDA panel, given the conservative approach of committee members the analyst said.

The key opinion leader Goodman spoke with said the drug could be approved anyway, he said. 

Second, there have never been FDA briefing documents that were so blatantly obvious about the FDA's positive view, Goodman said.

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Third, committee members seemed so upset with the FDA's views in those briefing docs that the members didn't really answer the first question the FDA asked regarding whether the Phase 3 EMERGE study on its own can be viewed as a positive study, the analyst said.

Even the key opinion leaders SVB Leerink interacted in the past year who were against approval considered the study to be positive, he said. 

Finally, Billy Dunn, director of the FDA's office of neuroscience, who is pushing for approval, remained passive during the combative Adcom discussions, Goodman said.

It as if Dunn was not as concerned about the panel agreeing with the FDA's positive view, the analyst said. 

Following the negative Adcom outcome, SVB Leerink lowered  its probability of success for aducanumab from 80% to 70% to acknowledge the higher risk profile.

BIIB Price Action: At last check, Biogen shares were slumping 29.03% to $233.44. 

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