Biogen to Spend $2.5 Billion Before Alzheimer’s Drug Results

Biogen Inc. will need to invest $2.5 billion in its experimental Alzheimer’s treatment before knowing whether it’s even effective, Chief Executive Officer George Scangos said.

“It’s probably a $2.5 billion investment to make,” Scangos said at the World Medical Innovation Forum in Boston on Monday. “It’s certainly promising and encouraging, it’s generated some excitement, rightfully so, but we still have to prove it works.”

The figure includes the costs of running trials and building a manufacturing plant for the drug. Biogen has to take the risk of building before having trial results because it takes four years to get a manufacturing plant set up, Scangos said in an interview after his speech.

The drugmaker’s shares soared when the company said in December that its drug, BIIB037, had worked so well in an early-stage trial that it would skip directly to large-scale trials intended to get the drug approved.

In its trial of about 200 patients, BIIB037 reversed build-up of beta amyloid in the brain and also reduced cognitive decline, according to Biogen.

Since the results showed the drug was more effective with higher doses and longer periods of use, and the data were statistically significant even in a small population, the drug’s benefit has to be substantial, Scangos said.

The biotech company is competing with industry giants including Eli Lilly & Co. and Merck & Co. to bring a drug to market, after years of failed trials for medications to treat Alzheimer’s.

Biogen will run two Phase 3 trials, with 2,700 to 2,800 patients, Scangos said.

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