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Biogen submitted its Alzheimer’s drug for approval. Now what?

Biogen on Wednesday announced that it completed and submitted the approval application for its closely watched Alzheimer’s disease drug, an update which appeared to restore some investor confidence in the Cambridge, Massachusetts-based biotech, as its market value promptly grew by roughly $3 billion.

The Food and Drug Administration now has until early September to decide whether to accept the application. If it does, and if it agrees to Biogen’s request for a speedy review, an approval decision could come by March. Under a standard review, the agency would likely issue a verdict by July 2021.

Should the FDA accept, it would set the stage for one of the biggest moments in biotech. An approval of aducanumab, as the drug is known, would be a landmark for a disease with no good treatment options, and would have lasting effects on both Alzheimer’s research and patient care. For Biogen, aducanumab could be a potential blockbuster product at a time in which other parts of its business are under pressure.

An approval, however, is far from certain.

The two late-stage clinical trials that were meant to showcase aducanumab’s effectiveness ended up producing unclear results, with one meeting its main goal and the other falling short. How the trials were designed, and how Biogen chose to analyze the data, have come under intense scrutiny.

Biogen also unnerved investors once already with its application. Based in part on discussions with the FDA, Biogen had anticipated submitting it in the first half of this year. But for several reasons, including the complexity of an “unprecedented dataset,” the company pushed back its filing target to the third quarter.

Several investment banks expect the FDA to review Biogen’s drug. But beyond that, they remain skeptical at aducanumab’s approval chances. Jefferies’ estimates a 55% probability of success under a “best case” scenario, while Stifel forecasts a 33% probability.

“Now comes the controversial part,” wrote SVB Leerink analyst Marc Goodman in a July 8 note to clients, adding that his team acknowledges that “aducanumab’s data package is not as clean as we would hope, and that many Alzheimer’s specialists don’t think the drug should be approved based on the current data set.”

However, with no currently available treatments for the root cause of Alzheimer’s, and with a rapidly growing Alzheimer’s patient population that totals around 5 million in the U.S. alone, the FDA may find itself pressured to approve aducanumab.

“[G]iven the unusual close working relationship between the FDA and Biogen, we still believe that the FDA wants to approve this drug in early Alzheimer’s,” Goodman wrote.

How lenient the agency could be if it chooses to review Biogen’s application will likely remain a point of interest. Some analysts have pointed to recent approvals as evidence that the FDA has a “glass-half-full” approach to neuroscience drugs and is willing to clear them based on mixed data.

Aducanumab isn’t like other neuroscience drugs, though. Despite questionable efficacy, doctors and analysts expect the desperate need for treatment would result in widespread use of aducanumab if approved, potentially raising the stakes for the agency’s decision.

As Biogen waits for the FDA, it’ll be dealing with separate challenges. The company’s main source of growth, a rare disease drug called Spinraza, faces increased competition from pharma giants like Novartis and Roche. At the same time, Biogen is at risk of losing patent protection on its top-selling product, the multiple sclerosis drug Tecfidera.