Biogen, Ionis Gain as Drug Hits Goal in Late-Stage Trial

  • Babies with spinal muscular atrophy saw improvements on drug
  • Biogen plans to seek approval to treat ‘devastating disease’

Biogen Inc. and Ionis Pharmaceuticals Inc. rose after the companies said their drug for a deadly muscle disorder in infants met its main goal in a late-stage trial.

Babies with spinal muscular atrophy who got the experimental drug, nusinersen, achieved motor-skills development milestones better than those who didn’t get the treatment, the companies said Monday in a statement. The drug also showed an acceptable safety profile, they said. Biogen said it paid Ionis a $75 million licensing fee and will soon file with regulators for approval.

Ionis, based in Carlsbad, California, soared 36 percent to $39.62 at 11:59 a.m. in New York. The shares earlier reached $40.82 in their biggest gain since 2001. Cambridge, Massachusetts-based Biogen rose 5.4 percent to $305.51.

The results are an “upside surprise as investors did not have high confidence the drug would work,” Michael Yee, an analyst with RBC Capital Markets, wrote in a note to clients. He estimated that the drug could bring in more than $1 billion in sales.

“Untreated infants never achieve a new motor milestone” after their first doctor visit, Stanley Crooke, Ionis’s chief executive officer, said on a call with analysts. “The differences between the treated infants and the control infants were highly statistically significant.”

The study, which looked at 122 patients with a form of the disease called SMA type 1, will be stopped early and all patients will be given the drug, the companies said. That suggests the treatment performed particularly well, according to Yee. In addition to the main goal of motor-skills milestones, other data from the trial was in favor of the drug, Crooke said on the analyst call.

Spinal muscular atrophy is caused by defective production of a protein that nerve cells in the spinal cord need to survive. Nusinersen is designed to increase the body’s production of that protein. Most babies with SMA type 1 die within the first two years of life, according to the U.S. National Institutes of Health. 

SMA affects about 30,000 to 35,000 patients in the U.S., Europe and Japan, according to Ionis. The two companies are also looking at the drug’s effectiveness in another form of the disease, SMA type 2, which causes muscle weakness that develops in babies’ first six to 12 months of life.

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