Biogen (BIIB 2.03%) recently won U.S. Food and Drug Administration (FDA) approval for its Alzheimer's disease drug Aduhelm. This decision was quite controversial, however, especially considering that the FDA's own advisory committee recommended against approval. In this Motley Fool Live video recorded on June 9, Motley Fool contributors Keith Speights and Brian Orelli discuss why the FDA overrode the advisory committee recommendation.

10 stocks we like better than Biogen
When our award-winning analyst team has a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has tripled the market.*

They just revealed what they believe are the ten best stocks for investors to buy right now... and Biogen wasn't one of them! That's right -- they think these 10 stocks are even better buys.

See the 10 stocks


*Stock Advisor returns as of June 7, 2021


Keith Speights: The big news this week -- and this news actually broke, I think, as you and I were winding down our Monday show, our Monday healthcare update. The big news this week is the FDA's approval of Biogen's aducanumab, which will be marketed under the brand name Aduhelm.

It's the first therapy approved to treat Alzheimer's disease in nearly two decades, but the advisory committee that reviewed the filing was dead set against approval. They overwhelmingly voted against recommending approval. I think the vote was 10 against and maybe one abstention. I don't think anybody voted in favor of approving this drug.

Brian, here's the big question for you: Why did the FDA override the committee's overwhelming recommendation against this drug and approve Aduhelm anyway? We can't hear you, Brian.

Brian Orelli: Can you hear me now?

Speights: Yeah, we can hear you now.

Orelli: The short answer is the FDA can do whatever it wants. Advisory committees, as the name implies, advise, and the FDA has the final say. I've been covering the industry for over 14 years and it's gone back and forth.

We used to say the FDA isn't required to follow the advisory committee's vote, but usually it does, so it was aligned together. Then the FDA [inaudible] more conservative. I would switch and say, no means no, if the committee votes no, then the FDA is also going to say no, but if the committee votes yes, then that maybe means maybe from the FDA because they were a lot more stricter.

Now it seems like they're getting a lot more lenient, and we saw this with Sarepta Therapeutics, their FDA approval a few years ago for their Duchenne muscular dystrophy. It didn't exactly have stellar data, but the FDA eventually ended up approving it. The agency seems to maybe pushing more toward catering to patients, and so I think that's the move here for this Alzheimer's disease drug is that they're more willing to go with data that is less than stellar.

I think it's really hard as investors during these transitions, until you've figured out the new rules, it's really difficult. At least we're not getting more lenient as long as you're not shorting, you're OK. You're just losing out on potentially making money, but when they go back to being more strict, now a lot of people are going to lose money because they're going to invest in things that they think they're going to get approved in or not, and then we'll see stocks go down and people will lose money.

Speights: I think I've seen some statistics that show about, I think it's around 85 percent of the time, historically the FDA goes along with the recommendation of an advisory committee. It might be higher than that, but it seems like I've seen it was 85 percent, but they don't have to.

As you said, this case was unusual though, because it was essentially a unanimous vote against recommending approval for the drug and several of the advisory committee members took very public stances adamantly against approval. I think that's what really makes this case unusual.

Orelli: Yeah, but if you're reading the tea leaves, you can oftentimes figure out what the FDA is thinking in their committee documents. They get released two days before the committee meetings.

Like the obesity drugs, we may have rejected the first time, the committees were generally positive on it but the FDA briefing documents were very negative. I said, they're not going to get approved and sure that's what they did.

Speights: It does make you wonder why do they even convened an advisory committee maybe.

Orelli: Yeah. Especially on this one because it seems like they weren't going to approve it one way or the other.

Speights: In this case it seems like the FDA just simply didn't care what the advisory committee had to say.