Skip to Content
Stock Analyst Update

FDA Approves Biogen's Aduhelm as Alzheimer's Treatment

We've raised the firm's fair value estimate to $401 from $350 per share.

Mentioned:

On June 7, the U.S. Food and Drug Administration approved Biogen's (BIIB) Aduhelm (aducanumab) as a treatment for Alzheimer's disease under its accelerated approval pathway, determining that the benefits of treatment outweighed the risks. We've raised our fair value estimate for Biogen to $401 from $350 following this news, as we had incorporated only a 40% probability of approval into our model, and the drug's list price ($56,000 annually) is significantly higher than we had assumed. We now model more than $7 billion in Aduhelm global sales by 2030. Overall, the incorporation of Aduhelm into Biogen's neurology-focused portfolio provides additional support for our wide moat rating.

Alzheimer's is a serious disease with significant unmet need, and the FDA concluded that the drug's clear ability to reduce amyloid plaques in the brain across clinical studies (a surrogate endpoint) appears likely to reduce the pace of cognitive decline—a first for an approved Alzheimer's therapy. As we've previously discussed, Biogen submitted mixed Aduhelm data to the FDA. Both phase 3 trials were halted in March 2019 due to assumed futility, but in October 2019, new data showed evidence of slowed clinical decline in the Emerge trial (but no significant benefit in the Engage trial). In its press release, the FDA noted that the advisory committee review in November 2020, which resulted in 10 of 11 committee members voting that the Emerge study was not sufficient for approval, did not specifically discuss a potential accelerated approval, which carries a requirement to confirm the benefit of the drug in a postapproval (phase 4) trial. We had assumed that the FDA might require such a trial before approval, but the FDA appears to have had more comfort with using levels of amyloid plaque reduction as a surrogate endpoint than we had assumed.

Morningstar Premium Members gain exclusive access to our full analyst reports, including fair value estimates, bull and bear breakdowns, and risk analyses. Not a Premium Member? Get this and other reports immediately when you try Morningstar Premium free for 14 days.

Karen Andersen does not own shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.

Transparency is how we protect the integrity of our work and keep empowering investors to achieve their goals and dreams. And we have unwavering standards for how we keep that integrity intact, from our research and data to our policies on content and your personal data.

We’d like to share more about how we work and what drives our day-to-day business.

We sell different types of products and services to both investment professionals and individual investors. These products and services are usually sold through license agreements or subscriptions. Our investment management business generates asset-based fees, which are calculated as a percentage of assets under management. We also sell both admissions and sponsorship packages for our investment conferences and advertising on our websites and newsletters.

How we use your information depends on the product and service that you use and your relationship with us. We may use it to:

  • Verify your identity, personalize the content you receive, or create and administer your account.
  • Provide specific products and services to you, such as portfolio management or data aggregation.
  • Develop and improve features of our offerings.
  • Gear advertisements and other marketing efforts towards your interests.

To learn more about how we handle and protect your data, visit our privacy center.

Maintaining independence and editorial freedom is essential to our mission of empowering investor success. We provide a platform for our authors to report on investments fairly, accurately, and from the investor’s point of view. We also respect individual opinions––they represent the unvarnished thinking of our people and exacting analysis of our research processes. Our authors can publish views that we may or may not agree with, but they show their work, distinguish facts from opinions, and make sure their analysis is clear and in no way misleading or deceptive.

To further protect the integrity of our editorial content, we keep a strict separation between our sales teams and authors to remove any pressure or influence on our analyses and research.

Read our editorial policy to learn more about our process.