What happened

Biotech heavyweight Biogen (BIIB -0.72%) saw its shares rise by as much as 43.7% in premarket trading Tuesday morning. The biotech's stock caught fire in early action in response to a pair of catalysts:

1. Biogen shocked the industry this morning by announcing that it plans on pursuing a regulatory application for the Alzheimer's disease candidate aducanumab in the United States. This high-value drug candidate was widely thought to be destined for the scrap pile after flaming out in twin late-stage trials earlier this year.

2. The biotech also released its 2019 third-quarter earnings ahead of the bell this morning. On this front, Biogen handily beat FactSet's consensus estimates for both earnings per share and revenue for the three-month period, giving investors another solid reason to bid up the company's shares.

So what

Biogen's decision to sally forth with an aducanumab regulatory filing in early 2020 reportedly centers around a new data analysis. The company said that this analysis showed that early Alzheimer's disease patients receiving the high-dose treatment of aducanumab exhibited a statistically significant reduction in clinical decline at week 78.

A medical form with Alzheimer's Disease printed in bold at the top.

Image Source: Getty Images.

In regard to the biotech's Q3 report, Biogen's better-than-expected multiple sclerosis revenue for the three-month period, combined with skyrocketing Spinraza sales, were the primary drivers behind this earnings beat.

Now what

Biogen has been kicking the can down the road on a possible bolt-on acquisition for several years at this point. Today's aducanumab news is almost certainly the reason behind the company's hesitation to pursue such a costly business development move.

The long and short of it is that aducanumab would be a game changer for the biotech from a revenue-generation standpoint. That said, the drug's regulatory review is anything but a slam dunk. Investors might want to think twice before chasing this red-hot biotech stock today.