Is the FDA Delay Actually Good News for Biogen's Alzheimer's Drug?

The Food and Drug Administration (FDA) recently extended its timeframe to approve or reject Biogen (BIIB 3.76%) and Eisai's (ESALY 1.66%) Alzheimer's disease drug aducanumab by three months to June 7, 2021. In this video from Motley Fool Live, recorded on Feb. 1, Fool.com contributors Brian Orelli and Keith Speights discuss how the delay could actually be good news for the companies.

Brian Orelli: Biogen and Eisai have experienced a three-month delay for their Alzheimer's disease drug, aducanumab. A little back story, they ran the clinical trial, it didn't seem like it worked. They stopped the trial. They looked closer at the data and saw that there was efficacy when patients were given more drug. The FDA called the advisory committee to review the data. The FDA sends the advisory committee their review before the meeting. It was pretty positive, with the exception of one statistical reviewer they didn't like the fact that they stopped the trial and then started again, which is not something that you would normally do -- or stop the trial and then look at the data and decide that it was positive. The committee of outside experts voted against recommending the drug. Biogen turned in additional information at some point during the review process and so that allows the FDA to push back the date by three months which they did, and now the PDUFA date for Prescription Drug User Fee Act date that the FDA shooting for deciding by is June 7. Do you think this is a good sign for Biogen if the FDA was going to can it, I'm not sure they would ask for new data. They might just ask for a new trial right now.

Keith Speights: Yeah. Well, Biogen shares jumped on this news. It's kind of a catch-22, or maybe not catch-22 is the best phrase, but if there's a candidate that everyone thinks has a good shot at getting approved and the FDA delays, the stock goes down. That's not good basically because getting the market has been pushed back. If it's a candidate that everybody thinks probably is going to be rejected and the FDA pushes back on their review, then everybody thinks, wait maybe there's a shot, maybe there's a chance. I think that's what's happening here. I think everybody's saying, OK, it looked like the FDA was going to clearly do a thumbs-down on this one after the advisory committee's recommendation against approval. Now there is a chance that the FDA could come back and say, OK, we found enough in the data to approve this Alzheimer's disease treatment. It remains to be seen. I don't think anybody should make a bet on this because you just don't know, but it's certainly better news for Biogen than many people were expecting.

Orelli: Yeah, and I think people have looked at just the approval rates of drugs that have experienced three-month delays because they've had to give new data and it's generally a good sign that if you get a delay then you're more likely to get approved.

Speights: But I will say, you and I both know this: It's relatively rare that the FDA will come back and approve a drug after a unanimous advisory committee vote against it.

Orelli: Yeah. I think that it has an uphill battle, but the FDA has the final say. They certainly have the ability to override the committee of outside experts.

Speights: It's rare, but it has happened.

Orelli: Right. Yeah.

Speights: It could happen.

Orelli: It could happen. It's less likely, the way I think of it usually for advisory committee meetings is that no means no and yes means maybe for the FDA. Typically no, usually means no but not always.

Speights: I would love for this therapy to be effective. Everybody wants some good Alzheimer's disease treatment. The landscape is littered with failure. Drugs that seem promising and then didn't pan out. I would love for there maybe something in the data that shows it could be effective, but we will just have to wait and see.

Orelli: I think they need to run another clinical trial. As much as I hate that and especially for anybody who owns Biogen shares and for all the patients who might want to get it and even in hopes of it working. But from an investor standpoint, I'd like to see an FDA where it's pretty clear what data is required. If you ask me before, can you do this? The answer would be wholeheartedly no. Now if the rules are changing it makes it a lot harder to handicap FDA decisions and then therefore whether you should invest before an FDA decision.

Speights: I totally agree. Very difficult.