Biogen Shares Climb as Novo Nordisk's Alzheimer's Drug Fails
The setback for Novo Nordisk's oral semaglutide removes a key competitor, strengthening the market position of Biogen's Alzheimer's treatment, Leqembi.
Biogen Inc. (BIIB) shares surged in Monday trading after competitor Novo Nordisk announced the failure of its closely watched Phase 3 trials for an oral Alzheimer's treatment, a development that significantly clears the competitive landscape for Biogen's drug, Leqembi.
Shares of Biogen climbed more than 3%, trading at $180.76 in the morning session, as investors recalibrated the market potential for Leqembi, which Biogen co-develops with Japanese partner Eisai. The move added over $750 million to Biogen’s market capitalization. Conversely, Novo Nordisk (NVO) shares tumbled nearly 10% on the news.
The catalyst for the market shake-up was a pre-market announcement from Novo Nordisk detailing disappointing results from its Evoke and Evoke+ trials. The studies found that its oral semaglutide, the same active ingredient in its blockbuster weight-loss drugs Ozempic and Wegovy, did not demonstrate a statistically significant reduction in the progression of Alzheimer's disease compared to a placebo.
"While semaglutide did not demonstrate efficacy in slowing the progression of Alzheimer's disease, the extensive body of evidence supporting semaglutide continues to provide benefits for individuals with type 2 diabetes, obesity, and related comorbidities," said Martin Holst Lange, executive vice president for Development at Novo Nordisk, in a statement acknowledging the outcome.
Novo's failure is Biogen's gain. The prospect of an easy-to-administer oral treatment from a pharmaceutical giant like Novo Nordisk was seen as a major long-term threat to Leqembi and Eli Lilly's donanemab, which are administered via intravenous infusion. With that threat now removed, Wall Street analysts were quick to highlight the improved outlook for Biogen.
Analysts at Jefferies noted that the trial failure removes a significant competitive overhang for anti-amyloid antibody treatments like Leqembi. In a note to clients, they stated the result could help accelerate the sales trajectory for Leqembi, particularly ahead of a potential 2026 launch of a more convenient subcutaneous, at-home version. The drug, which received full FDA approval in 2023, is one of the only available treatments proven to slow the cognitive decline associated with early-stage Alzheimer's.
The Alzheimer's treatment market is a high-stakes arena in the pharmaceutical industry, with millions of patients and a profound unmet medical need. Biogen has been a pioneer in the space, though its journey has been volatile. The company's first Alzheimer's drug, Aduhelm, saw a controversial approval and ultimately failed to gain commercial traction. Leqembi, however, has shown more definitive clinical benefits and has been steadily gaining adoption.
In a separate development Monday, Biogen also announced a new research collaboration with Dayra Therapeutics, a venture launched by Versant Ventures. The partnership aims to discover and develop oral therapies for a range of immunological conditions, signaling Biogen's continued efforts to diversify its pipeline beyond neurology. While a positive step, the market's focus remained squarely on the competitive win in the Alzheimer's space.
The road ahead for Leqembi is not without challenges, including navigating reimbursement complexities and the logistics of patient diagnosis and infusion. However, with one fewer major competitor on the horizon, its path to becoming a foundational therapy in Alzheimer's treatment has become substantially clearer.