What happened

Shares of Biogen Inc. (NASDAQ:BIIB) were up 15.2% as of 11:35 a.m. EDT on Friday after the biotech, along with partner Eisai, reported encouraging results from a phase 2 clinical study of BAN2401 in treating Alzheimer's disease. Patients taking BAN2401 achieved statistically significant improvement compared to patients on placebo after 18 months in slowing progression of Alzheimer's disease and in the reduction of amyloid accumulations in the brain.

The two drugmakers enrolled 856 patients with early Alzheimer's disease in the phase 2 clinical study. These patients were randomized into five groups -- four receiving varying doses of BAN2401 and one placebo group. Statistically significant improvement on key endpoints of the study was observed in patients receiving 10 mg/kg biweekly of BAN2401, the highest of the treatment doses.

Physician holding chalkboard with "Alzheimer's disease" written on it

Image source: Getty Images.

So what

These results for BAN2401 were a big surprise. Biogen and Eisai announced 12-month results for the phase 2 clinical study of the drug in December 2017. BAN2401 failed to achieve its primary endpoint at that point in the study. What happened? Biogen noted that the 12-month results used Bayesian analysis, which relies on probabilistic statistical methods. The 18-month results, on the other hand, used a conventional statistical method.

The bigger story, however, was that the latest results appear to support what's called the amyloid hypothesis. The theory behind the amyloid hypothesis is that beta-amyloid proteins build up in the brain, causing communication problems between brain cells and eventually killing brain cells. 

However, the landscape is littered with drugs based on the amyloid hypothesis that ultimately flopped. Merck, for example, threw in the towel on Alzheimer's disease drug verubecestat last year. Eli Lilly has had multiple setbacks.

The phase 2 results for BAN2401, though, provide renewed hope for supporters of the amyloid hypothesis. It could also boost the prospects for Biogen's other Alzheimer's disease candidates. The most important of these is aducanumab, which market research firm EvaluatePharma ranks as the No. 3 most valuable pipeline asset in the biopharmaceutical industry.

Now what

Although promising, the results for BAN2401 are still very early. Biogen and Eisai plan to talk with regulatory authorities about the next steps, which will likely lead to a larger phase 3 clinical study.

All eyes will now probably be on Biogen's progress with aducanumab. The biotech is evaluating the drug in a couple of phase 3 clinical studies. Top-line results from one of those studies could be available by early 2020 and perhaps a little sooner than that.

Positive phase 2 results for BAN2401 don't necessarily translate to success for aducanumab. They don't even mean that BAN2401 itself will ultimately be successful. Still, the latest results are very good news for Biogen and makes the biotech stock a more intriguing one to consider for investors willing to take on significant risk.