FDA’s landmark approval of Biogen’s Alzheimer’s drug sends Cogstate up 60 per cent
Health & Biotech
Health & Biotech
Link copied to
Cogstate (ASX:CGS) has become the latest ASX health stock to gain from an FDA green light even though it is only indirectly involved – right now.
Overnight the US regulator approved the first Alzheimer’s therapy since 2003 and the first drug that has been shown to slow the disease itself rather than just treating symptoms.
Namely, a drug by US biotech Biogen which is marketed under the name Aduhelm.
What does Cogstate have to do with this?
Cogstate is partnered with a Japanese pharmaceutical company Eisai and Eisai is partnered with Biogen.
Cogstate first partnered with Eisai in October last year whereby Eisai had exclusive rights to develop and distribute Cogstate’s digital cognitive assessment technologies.
Cogstate today told shareholders that “it is expected that such digital cognitive assessments will play an important role in supporting the types of large-scale cognitive assessment that will be necessary in the launch of disease modifying therapies such as Aduhelm”.
It also said Aduhelm’s approval means Eisai no longer has the right to accelerated termination after the fifth year of the deal and it is now contractually obligated to make minimum royalty payments for five years thereafter – equating to at least US$20 million.
Cogstate shares rose by nearly 60 per cent today.
Biogen’s (NDQ:BIIB) shares also rose overnight – by 38 per cent, capitalising the company at US$59.6 billion.
The approval comes amidst projections that people living with Alzheimer’s in America will reach nearly 13 million by 2050. It also marks a major step in what has been a long journey for Biogen.
Biogen actually stopped development of the drug two years ago after analysis showed it was unlikely to work but ultimately did seek FDA approval after further analysis which was more positive.
The move has been closely watched by the US medical community, with some doctors pledging not to prescribe it even if approved because of the mixed clinical trial results.
The drug was not approved by the conventional 510(k) regulation surrounding medical devices but a special accelerated approval pathway.
It will mean the drug will be covered by America’s Medicare but patients may have to account for some of the cost. And it won’t be cheap – Biogen has estimated it could cost $56,000 annually at list prices for patients without insurance.
Yet with only five other approved drugs that could address symptoms and none shown to slow the disease, it is undoubtedly a landmark moment for Alzheimer’s patients as well as their family and friends.
Harry Johns, the CEO of the Alzheimer’s Association declared it was “a new day”.
“This approval allows people living with Alzheimer’s more time to live better. For families it means being able to hold on to their loved ones longer,” he said.
“It is about reinvigorating scientists and companies in the fight against this scourge of a disease. It is about hope.”
Commenting from the FDA was Patrizia Cavazzoni, director of the FDA’s Center for Drug Evaluation and Research, who predicted Aduhelm wouldn’t be the only drug in its company for long.
“As we have learned from the fight against cancer, the accelerated approval pathway can bring therapies to patients faster while spurring more research and innovation,” she said.
In a telling sign, one of the few other ASX stocks fighting this disease along with Cogstate, Actinogen (ASX:ACW), rose 10 per cent today and has more than tripled in the last month.