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Biogen shares are up 7.9% so far this year and down 8.3% over the past 12 months.
Dominick Reuter/AFP via Getty Images
Investor conversations around the big biotech
Biogen
in recent months have focused on the company’s controversial Alzheimer’s disease drug, aducanumab, which the U.S. Food and Drug Administration is still deciding whether or not to approve.
But in a note out late Wednesday, Truist analyst Robyn Karnauskas argued that investors should be paying more attention to the depression drug that
Biogen
(ticker: BIIB) is developing in partnership with
Sage Therapeutics
(SAGE).
Sage announced positive data on the drug, called zuranolone, in an ongoing major depressive disorder study on Wednesday. Karnauskas said that the study was good, but that the main event is another major depressive disorder study of the drug that is set to deliver data in the first half of this year.
If the study, known as Waterfall, is positive, Karnauskas wrote, Biogen shares could climb as much as $72. The stock closed up 1.6% on Wednesday and was up 0.1%, at $264.48, in recent trading.
“Beyond aducanumab…we think investors should not write off depression drug zuranolone,” Karnauskas wrote.
Biogen shares are up 7.9% so far this year and down 8.3% over the past 12 months. The FDA made a surprise announcement in late January that it was extending its own deadline for deciding whether to approve aducanumab, the Alzheimer’s drug. Meanwhile, mixed data on a similar Alzheimer’s therapy from
Eli Lilly
(LLY) has had little clear effect on Biogen shares.
Aside from aducanumab, Biogen is facing other challenges. Its top seller, the multiple-sclerosis drug Tecfidera, is facing unexpected competition from a generic version. Other key drugs are also facing growing competition.
Zuranolone is one bright spot, and Karnauskas says that that spot is brighter after Wednesday’s data.
“Compared to [selective serotonin reuptake inhibitors], which take 2 to 3 months to get a response and most patients are treated for 6 months, we think zuranolone offers a faster response and better safety profile,” she wrote.
Sage struggled in 2020, after the failure in late 2019 of another trial of zuranolone in major depressive disorder patients, laying off more than half its staff. But investors have not given up hope for the drug.
Write to Josh Nathan-Kazis at josh.nathan-kazis@barrons.com