Major benchmarks were higher for most of Tuesday's session as investors parsed earnings reports, but fell in the afternoon. The Dow Jones Industrial Average (DJINDICES:^DJI) and the S&P 500 (SNPINDEX:^GSPC) closed at their lowest levels of the day, but more stocks on the NYSE were up than down. The energy sector led the market, and technology was the weakest sector.
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Biogen reveals that abandoned drug actually worked after all
Shares of Biogen soared 26.1% after the company announced it plans to seek regulatory approval for an Alzheimer's drug after discontinuing late-stage trials last March. The biotech reversed its position on the drug candidate, aducanumab, after discussions with the U.S. Food and Drug Administration (FDA).
Biogen stock cratered 29% in a single day when the company announced it was giving up on two phase 3 trials of aducanumab, which targets amyloid plaque in the brain, based on a futility analysis that determined the trials wouldn't meet their predetermined success criteria. The company said in a conference call that examination of a larger set of data in consultation with the FDA showed that the futility analysis didn't accurately predict the outcome, and in fact patients with longer exposure to a higher dose of the drug showed a significant reduction in clinical decline of cognition and function.
Besides being a positive development for aducanumab, the findings renew hope for Biogen's other amyloid-fighting drug candidate, BAN2401, which the company plans to submit to the FDA in early 2020.
And if that wasn't enough good news for Biogen investors, the company also reported third-quarter results that blew away expectations. Revenue grew 5% to $3.6 billion and non-GAAP earnings per share jumped 24% to $9.17. Analysts were expecting EPS of $8.27 on revenue of $3.54 billion.
McDonald's misses profit expectations
McDonald's announced results for the third quarter that missed Wall Street expectations and shares dropped 5%. Revenue grew 1.1% to $5.43 billion, slightly missing the analyst consensus, and earnings per share increased $0.01 to $2.11, well below the $2.21 analysts were expecting.
Global comparable sales were up 5.9%, a respectable result but a deceleration from last quarter's 6.5% gain. International licensees grew sales 8.1%, but comparable-sales growth in the U.S. was a disappointing 4.8%. Systemwide sales, a metric that includes sales at franchisees that the company doesn't record as revenue, increased 7% in constant currency to $26 billion.
McDonald's results last quarter were well received by the market, but intense competition in the U.S. and investments in technology and remodels are hurting profit for the restaurant giant, and investors who have bid the stock up 14% this year had high expectations this time.