Biogen's R&D strategy fails to impress after Alzheimer's trial flop

The dust has settled at Biogen following the company’s disastrous announcement that it was ending development of Alzheimer’s drug aducanumab, and in its latest Q1 figures the company hoped to win over investors with a revised R&D strategy based around MS, ophthalmology, and continued focus on Alzheimer's.

Biogen’s multiple sclerosis pill Tecfidera continued to be the company’s top selling drug in Q1, bringing in revenues of $999m for the quarter, up 1% compared with last year.

The company successfully fought off a patent challenge in October last year, and for now the $4 billion a year blockbuster looks set to enjoy patent protection until 2028.

But the market for MS drugs is increasingly competitive, with Novartis and Germany’s Merck KGaA marketing rival oral therapies as well as several injected options.

Biogen is hoping that a new alternative, Vumerity (diroximel fumarate), will have the same beneficial effects of reducing the inflammation that causes the disease to progress, but without the gastrointestinal side effects.

The drug is filed with the FDA, which is set to make a regulatory decision in the fourth quarter this year.

Revenues from MS drugs are also helped by royalties from Roche’s highly successful new launch Ocrevus, which the two companies developed together before the big Swiss pharma opted to take over marketing and R&D at the beginning of the decade.

Another longer-term prospect for Biogen is drugs added to the pipeline from its $800m acquisition of Nightstar Therapeutics in March, most notably its NSR-REP1 gene therapy for a rare retinal disease.

CEO Michel Vounatsos also pointed to the company’s “solid operational performance”, with total revenues up 11% to $3.5 billion, and net income up 11% compared with last year’s Q1.

Driving this growth was Biogen’s Spinraza, used for spinal muscular atrophy, which generated sales of $518m, up 42% compared with the last Q1.

The company is also developing drugs in a range of other neurology diseases including Parkinson’s disease and epilepsy.

However the failure of aducanumab overshadowed the results and Biogen's attempts to talk up its pipeline and already-marketed drugs were not well received.

Investors are hoping for a change in tack following the aducanumab debacle but Biogen execs also pledged to continue with Alzheimer’s research despite the trial flop that wiped billions off the company’s value at the end of March.

The company is pushing on with Alzheimer’s research focusing on another antibody targeting amyloid called BAN2401 in partnership with Eisai, and research into the tau protein tangles that have also been linked with the disease.

The feeling among investors is that the decision to continue with BAN2401 was taken by Eisai - but whatever the reason it looks to be a questionable call given the string of trial failures among drugs targeting amyloid.

Understandably weary of talk about further Alzheimer’s projects, which on previous form look likely to fail, investors were unimpressed and the company’s share price fell by 2.5% on the Nasdaq following the announcement.