Biogen dives after canning Alzheimer's drug trials

A joint statement from the two pharmaceutical companies said the phase III trials had been halted following a "futility analysis" conducted by an independent data monitoring committee, which concluded the trials were "unlikely to meet their primary endpoint upon completion".

Bigen chief executive Michel Vounatsos said: "This disappointing news confirms the complexity of treating Alzheimer’s disease and the need to further advance knowledge in neuroscience. We are incredibly grateful to all the Alzheimer’s disease patients, their families and the investigators who participated in the trials and contributed greatly to this research."

The Nasdaq-listed company, which trades on the index as BIIB, said the study's primary objective had been to evaluate the efficacy of monthly doses of aducanumab as compared with placebo in slowing cognitive and functional impairment as measured by changes in the Clinical Dementia Rating-Sum of Boxes score.

The treatment had performed well in mid-stage Phase II trials, exciting investors after a slew of Alzheimer's drugs in development by heavy-hitting pharmaceutical outfits have failed to reach completion in recent years.

"Biogen’s history has been based on pioneering innovation, learning from successes and setbacks. Driven by our steadfast commitment to patients and our strong business foundation, we will continue advancing our pipeline of potential therapies in Alzheimer’s disease and innovative medicines for patients suffering from diseases of high unmet need," said Vounatsos.

Analysts at RBC Capital Markets said: "We view this as a transformative failure for BIIB's pipeline; elimination of all Alzheimer’s revenues from our model and reduction in our terminal growth rate would reduce our discounted cash flow valuation to circa $240/share (from circa $318/share), though we believe the stock could overshoot - given our view many investors owned BIIB to not miss out on what could have been one of the biggest blockbuster products in the pipeline of large biopharma, and the failure will likely expose the significant risks to BIIB's base MS business and SMA franchise."

Biogen shares were down 28.87% at $228.03 at 1612 GMT.