Biogen’s Alzheimer’s drug is facing its moment of truth. Biotech investors are watching.

Illustration by Elias Stein


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Monday, June 7 is a date that biotech investors should circle their timelines, if they haven’t already. This is the deadline for the United States Food and Drug Administration to decide whether or not to approve

Biogenicof

controversial Alzheimer’s disease treatment aducanumab.

This news will have huge implications for patients, for Biogen (ticker: BIIB) and for the biotechnology industry.

More than six million Americans have Alzheimer’s disease and, as Barron’s highlighted in February, it has been nearly two decades since a new treatment for the disease was approved. Still, experts have wondered if aducanumab is good enough. An FDA advisory committee said in November that data collected by Biogen did not prove the drug’s effectiveness.

The FDA’s move is sure to spark a big move in Biogen stock. Jefferies analyst Michael Yee wrote on May 12 that the stock could climb to 70% if the drug is approved – and drop to 40% if it is rejected.

And there will be ripple effects. Biogen shares represent 3.6% of

IShares Nasdaq Biotechnology

exchange-traded fund (IBB). Biogen’s success would boost ETF and help biotechnology recover from a recent plunge.

But for Biogen, the challenges won’t end on June 7. Even if aducanumab is approved, healthcare payers might be hesitant to pay for it. The Institute for Clinical and Economic Review, an influential voice on drug pricing, released a draft report on May 5 that presented aducanumab prices based on cost-benefit calculations. They are a fraction of the price Biogen would have to charge if the drug is approved.

Next week

Monday 31/05

Equities and Fixed Income markets are closed respecting Memorial Day.

The organization for Economic Cooperation and Development publishes its latest economic outlook. In its March interim report, the OECD forecast a 5.6% growth rate for global gross domestic product in 2021, a full percentage point upward revision from the December 2020 forecast.

Tuesday 6/1

Bank of Nova Scotia,

Canopy growth,

Hewlett Packard Enterprise,

and

Focus on video communications

announce quarterly results.

The Institute of Supply Management publishes its purchasing managers index in the manufacturing sector for the month of May. The consensus estimate is for a reading of 60.8, roughly equal with the April data.

The Census Bureau reports April construction spending. It is expected to rise 0.6% month over month to a seasonally adjusted annual rate of $ 1.52 trillion. Construction spending remains just below its all-time high in January of this year.

Wednesday 6/2

Advance Auto Parts,

NetApp,

and PVH report income.

Philip Morris International

hosts a webcast hosted by CEO Jacek Olczak to discuss the company’s sustainability strategy.

The Federal Reserve is releasing the beige book for the fourth of eight times this year. The report presents anecdotal data on the health of the economy collected by the 12 districts of the Federal Reserve Bank.

Thursday 6/3

ADP publishes its National Employment report for May. The consensus estimate is for a gain of 610,000 jobs in the private non-farm sector, after an increase of 742,000 in April.

Broadcom,

Cooper

Cos.,

DocuSign,

Jm smucker,

and

Lululemon

Athletica hosts conference calls to discuss the results.

The Bureau of Economic Analysis reports total light vehicle sales for May. In April, they hit a seasonally adjusted annual rate of 18.5 million, the highest number since July 2005.

ISM outputs his PMI Services for May. The consensus estimate is for a reading of 63.2, compared to 62.7 for April’s figure.

Friday 6/4

Amgen

hosts a conference call to discuss drug trial data from its oncology pipeline. The information will be presented at the 2021 annual meeting of the American Society of Clinical Oncology, which will take place virtually June 4-8.

The Labor Office Statistics releases the jobs report for May. Economists are forecasting an increase of 700,000 in non-farm payrolls, after a relatively modest gain of 266,000 in April. The unemployment rate is expected to drop slightly to 5.9% from 6.1%. April’s increase was a huge shortfall from the $ 1 million jump some economists had expected.

Write to Josh Nathan-Kazis at [email protected]


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About Hector Hedgepeth

Hector Hedgepeth

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