What Was Really Behind Biogen’s Surge Last Week

We got a call from a dear friend last night.

He’d been going through a hell of a time and needed to hear a familiar voice.

We put down our work and listened.

Sometimes – perhaps even most of the time – that’s all it takes.

But there’s a growing nightmare in our country. Too often these days, the voice on the other line doesn’t know who we are.

We got a glimpse of how powerful the pain is in the stock market last week. Shares of Biogen (BIIB) soared after the company surprised investors with news that it was once again pushing ahead with its Alzheimer’s treatment.

Shares that spent all year falling suddenly came alive again.

Despite the fact the company’s drug is far from a certainty (as we’ll explain below)… investors put quite a bid under the stock. Billions of dollars traded hands.

It shows the immense pain and desperation that surrounds one of the most heinous of diseases.

Enough for Wall Street?

Alzheimer’s disease is deadly.

It kills more folks than breast cancer and prostate cancer combined.

And the problem is getting worse. Deaths from the disease have risen by 89% over the last 20 years.

Clearly, whoever can eradicate this nasty disease is going to do some great good… and get rewarded handsomely for their efforts.

It’s why Wall Street celebrated Biogen this week.

But do America’s financial markets – for all their capitalist might – have what it takes to solve this problem?

The Street, after all, is littered with the tickers of companies that failed to find a cure… taking the fortunes of their optimistic investors with them.

Wall Street, we must remember, thrives on numbers and the knowable. A cure for a disease like Alzheimer’s is certainly not knowable.

But that didn’t stop Jim Cramer, the TV stock-picking celebrity who never misses an opportunity to yell, from getting quite excited by this week’s news.

“It would be the biggest drug ever,” he said of Biogen’s aducanumab. “The whole concept of senior living will change.”

“You know who’s going to take this drug?” he asked. “Everyone.”

Cramer is not entirely wrong, but he’s certainly not right.

His words are more than a tad dangerous, especially for folks dealing with the nasty disease.

It points us to a major flaw in the nation’s Wall Street-funded drug culture.

When Greed Goes Bad

If Cramer had his folks do just a bit of research, he would have added quite a caveat to his statement.

He would have told the investing world that Biogen is now aiming its trials at a very specific group of folks… Alzheimer’s sufferers with specific genes.

The first trials, after all, were canceled when the company saw no statistical boost in outcome amongst the folks trying its drug. But Biogen’s researchers kept tabs on patients even after the trial was called off. They soon realized that a very small subset of folks did see some statistical improvement.

Yes, there were immense side effects and many study participants had to bail on the project because it was doing more harm than good… but some folks with a lucky set of genes saw hope.

That’s why Cramer is wrong.

Even if aducanumab does get through the FDA’s gauntlet, it won’t change the “whole concept of senior living,” and not everyone will take it.

Far from it.

It could be a powerful drug… but just for a few folks.

It pushes the company’s executives onto a dangerous precipice. They can spend billions pushing the drug forward… only getting it approved for a few folks. Or they can cancel the project and move on to something bigger – something that will make shareholders much happier.

It’s what makes Cramer’s statement so dangerous. Investors poured back into the stock looking for a miracle… that’s highly unlikely to come.

As that reality sets in, we’ll surely see the stock and its executives come under pressure.

It brings us to an idea from Maria Carrillo, the chief science officer for the Alzheimer’s Association.

Capitalism’s Quiet Side

Here’s a bit of what she wrote in an editorial published by Time magazine last week.

Historically, an enormous challenge for research in complicated diseases like Alzheimer’s has been that promising early science can often get stuck in a sort of limbo known within the scientific community as the “valley of death” – the divide between the earliest steps in research and human clinical trials.

The cause for such a divide in this case is simple: money.

Potentially promising high-risk, high-yield research efforts often stall because they are too novel or too risky for the government or pharmaceutical companies to support. Non-profit and private sector funding can and must play a vital role in filling the current gap.

You’ve no doubt heard variations of this theme.

We’ve pointed a finger at Big Pharma for downplaying the immense potential of natural cures… simply because there is no money in them.

We’ve griped about doctors who are in the pockets of pharmaceutical companies and their slick (and often pretty) sales reps.

And we even spoke at the FDA’s headquarters this spring and wagged our finger at its ass-backward regulatory process that makes it all but impossible for the “little guy” to do anything big.

It’s sad to think that may be the case for something as painful and prevalent as Alzheimer’s.

Some folks may be helped, potentially even cured… but is there enough of them to make it worth the $50 billion company’s time?

Probably not.

For that, we need another solution.

As we are tremendous fans of Know-How, this is a big topic with us.

Our memory and our brain’s performance are things we take quite seriously.

They’re our greatest assets.

If we lose them, nothing else will matter.

We’ll never find a cure for Alzheimer’s. That’s not what we do. But we do have hope. And we have found ourselves (as in Manward) in a powerful partnership with some folks who know a whole lot more about it than we do.

We’ll share more on what we’ve been up to and what’s to come out of this unique effort when we pick up the pen later in the week.

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