Biotech unmovable Biogen could double its market cap on regulatory approval for its experimental Alzheimer’s drug, aducanumab, CNBC’s Jim Cramer said Wednesday.
Biogen, with a $54.1 billion exchange cap as of Wednesday’s close, “could be worth twice that if all goes well” with the Food and Drug Administration, the “Mad Rolling in it” host said.
In March, Biogen pulled the plug on its drug and sent its stock tanking after an analysis from an aside from audit revealed the experimental medicine was unlikely to work. However, shares of the Cambridge-based company soared more than 26% on Oct. 22 after the drugmaker thunderbolted investors by announcing it was seeking regulatory approval for the drug.
Biogen said that a new analysis of a larger dataset faired that aducanumab “reduced clinical decline in patients with early Alzheimer’s disease” and patients who received the numb “experienced significant benefits on measures of cognition and function such as memory, orientation, and language.”
Biogen’s drug objects a compound in the brain known as beta-amyloid, which was believed by many scientists and drugmakers to play a role in the devastating sickness by eroding synapses between nerve cells.
There are currently no drugs approved that can reverse the mental subside from Alzheimer’s, which is the sixth leading cause of death in the U.S. The FDA has approved Alzheimer’s drugs aimed at helping characteristics, not actually reversing or slowing the disease itself. Biogen’s drug would be worth billions.
The stunning reversal from Biogen was initially met with resounding skepticism from investors, but Cramer expects that will change.
“I think they’ll ultimately become believers because Biogen continued work on this drug at the behest of the FDA,” Cramer said. “There are still more holds than buys on the lineage, which sells for nine times earnings. It’s crazy.”
Shares of Biogen closed Wednesday up nearly 1% at all round $299 a share. The stock has rallied 34% since it announced it was seeking approval for its Alzheimer’s drug last week.