What happened

Biotech titan Biogen (NASDAQ:BIIB) saw its shares rise by 8.73% last month, according to data from S&P Global Market Intelligence. This healthy march northward was sparked by an encouraging clinical update for the biotech's early-stage Alzheimer's disease drug candidate, aducanumab, toward the end of the month.

Specifically, Biogen reported that the long-term extension data from aducanumab's phase 1b study supported the design of the drug's ongoing phase 3 trials for early-stage Alzheimer's and seemed to back up the so-called "amyloid hypothesis" that posits that a reduction in amyloid plaques within the brain should improve cognitive abilities in patients afflicted with this devastating neurodegenerative disorder.  

A digital illustration of a brain inside a human head, with strands of DNA in the background.

Image Source: Getty Images.

So what

While the amyloid hypothesis appears to be based on sound logic, the late-stage clinical data across a variety of experimental candidates has so far provided little empirical support that lowering plaque levels within the CNS is, in fact, the key to battling this deadly disease. Long story short, Biogen's aducanumab, which could easily generate several billion in sales if approved, is part of a class of drugs that have yet to live up to the hype. As such, this bump in the biotech's share price based on a highly speculative drug candidate probably isn't warranted -- despite the awe-inspiring commercial potential of a truly disease-modifying Alzheimer's drug. 

Now what

Aducanumab's dual phase 3 studies -- Engage and Emerge -- are both scheduled to wrap up in early to mid-2022. That puts a top-line data readout for these studies on track for perhaps the third quarter of 2022 -- although earlier preliminary readouts may occur as soon as late 2019 or early 2020.

In other words, this high-value Alzheimer's drug candidate shouldn't loom large in the company's valuation for at least a few more years, and even then, this particular clinical asset should probably be viewed as icing on the cake, if things go according to plan, because of the problematic history of amyloid-busting drugs in general.

Point blank: You may want to ignore the spikes -- and dips -- in Biogen's valuation resulting from aducanumab's clinical progress at this stage, and instead focus on the company's other value drivers, such as its newly launched spinal muscular atrophy medicine Spinraza. After all, Spinraza is on track to become a megablockbuster in its own right.

George Budwell has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Biogen. The Motley Fool has a disclosure policy.