Ever since Biogen (NASDAQ:BIIB) revived a phase 3 Alzheimer's program a year ago, investors have been waiting with bated breath for the next steps. The company submitted aducanumab, the investigational Alzheimer's treatment, for regulatory review in July. Now, an advisory committee is set to meet on Nov. 6 to weigh in on whether the U.S. Food and Drug Administration (FDA) should approve the drug candidate.

The meeting is particularly important for Biogen considering the company's most recent earnings report. The biotech cut its 2020 earnings forecast due to generic competition weighing on its multiple sclerosis (MS) blockbuster drug, Tecfidera. Biogen also reported declining sales for its overall MS portfolio. A win for its Alzheimer's treatment candidate would offer Biogen a much-needed new growth driver. Let's take a look at where things stand.

Medical experts examine trial data at a meeting.

Image source: Getty Images.

A quick recap

First, a bit of background on aducanumab. Early last year, Biogen halted the program after an independent committee said trials were unlikely to meet their primary endpoint, which was to slow patients' cognitive and functional decline. About six months later, Biogen shocked investors when it brought back the program and said it would soon submit the drug for regulatory approval.

Emerge and Engage trials

What was the reason for Biogen's decision? Biogen studied a broad data set from two trials: one called Emerge and another called Engage. Emerge patients, who were given a higher dose of aducanumab, showed a decrease in clinical decline. This means the treatment produced benefits in areas such as memory, orientation, and language. Engage, which started patients at a lower dose than the Emerge trials, did not meet this primary endpoint. But a second review of Engage, which examined a subgroup of patients who received the higher dose, produced the same findings as Emerge.

Now, the big near-term question is whether the advisory committee, which is made up of a panel of experts in the field, will support an aducanumab approval. If it does, investors will likely welcome the news and we should expect a boost for Biogen's shares.

That said, whatever the committee decides, it won't necessarily determine aducanumab's future. While the FDA often follows committee advice, it isn't required to do so. The FDA approves 88% of drug candidates that received a thumbs up from committees, according to a McKinsey & Co. report. The regulatory agency didn't approve 86% of those that committees voted down, the same study showed. So while the advisory committee decision may offer us clues about aducanumab's future, the FDA may still surprise us.

Accepted for priority review

What are the chances of an FDA approval? The FDA has accepted the submission for priority review, a status granted to drug candidates that may greatly improve treatment options for serious illnesses. If aducanumab is approved, it would be the first Alzheimer's treatment to reduce clinical decline. According to Biogen, the FDA said it will act early on the review if possible. That suggests a decision may come before the FDA's deadline to take action on this submission, which is March 7.

Still, investors and analysts are on the fence about the strength of Biogen's trial data. And no matter how much the world needs a new Alzheimer's drug, Biogen only will succeed if trial findings convince the FDA of the treatment's efficacy. RBC Capital Markets recently hosted its own unofficial advisory panel of experts, and the majority voted against approval.

Biogen shares have slipped about 9% this year as investors have worried about the fate of aducanumab and the threat of generic competition approaching Tecfidera.

Ten Tecfidera generics

Biogen said this week that more than 10 Tecfidera generics have been approved, and at least six are already on the market. Tecfidera sales fell 15% in the third quarter year over year, and total MS program sales slipped 4%. Vumerity, a drug Biogen has been grooming to replace Tecfidera, brought in $15 million in the quarter, compared to Tecfidera's $953 million. The FDA only approved Vumerity last October, but it's already clear that sales will have to accelerate if Biogen expects Vumerity to compensate even somewhat for Tecfidera in the future.

Considering the current state of Biogen's MS sales, the advisory committee's decision (and ultimately the FDA's decision) on aducanumab is critical. And a treatment for Alzheimer's -- a disease that affects more than 5 million people in the U.S. alone -- could be the silver bullet the company needs.

If Biogen doesn't score an aducanumab win, I'm not optimistic about the company's near-term revenue growth and share performance. In this case, I would hold off on buying Biogen shares. But I wouldn't lose hope in the biotech giant forever. The company has a pipeline of nearly 30 investigational products and expects to report data on six mid-to-late stage programs by the end of next year. That means it's a good idea to keep an eye on pipeline progress and possibly come back to Biogen when it's further down the road.