Will Biotech ETFs Benefit from Biogens New Alzheimers Drug?
Biotech investors may have reason to celebrate this week, as the FDA approved Biogens Alzheimers disease drug Aducanumab on Monday, ushering in the first medication to be allowed by U.S. regulators to help the mental deterioration seen in people living with Alzheimers. The drug is also the first new medicine for the disease in nearly two decades. The Food and Drug Administrations decision represented the first new medicine for the disease in almost 20 years, and was something investors had been awaiting for some time. In addition to its benefits for patients, Aducanumab, which is marketed under the name Aduhelm, is projected to provide billions of dollars in revenue for Biogen, whose stock was even halted prior to the announcement, due to expected increases in volatility. We are well-aware of the attention surrounding this approval, Dr. Patrizia Cavazzoni, director of the FDAs Center for Drug Evaluation and Research, said in a press release. We understand that Aduhelm has garnered the attention of the press, the Alzheimers patient community, our elected officials, and other interested stakeholders.  With a treatment for a serious, life-threatening disease in the balance, it makes sense that so many people were following the outcome of this review, Cavazzoni added. At least in the short-term, the new Alzherimers drug could also benefit ETFs with Biogen, such as the Invesco Dynamic Biotechnology & Genome ETF (PBE), the VanEck Vectors Biotech ETF (BBH), and the First Trust NYSE Arca Biotechnology Index Fund (FBT). BBH in particular has seen considerable gains over the last year, as it also contains Moderna, which was one of the pioneers in creating a coronavirus vaccine. The Food and Drug Administration said it will continue to observe the drug interactions, monitoring for issues as it reaches the U.S. market. The agency permitted approval for Aducanumab assuming that Biogen performs another clinical trial. Alzheimers disease is a devastating disease that affects more than 6 million Americans, according to estimates by the Alzheimers Association. The cognitive problems associated with Alzheimers result in a neurodegenerative disorder that slowly destroys memory and thinking skills. By 2050, the number of patients with Alzheimers is predicted to reach roughly 13 million, according to the the Alzheimers Association, and so the drug brings renewed optimism for many. It is a new day, Harry Johns, CEO of the Alzheimers Association, said in a statement. This approval allows people living with Alzheimers more time to live better. For families it means being able to hold on to their loved ones longer. It is about reinvigorating scientists and companies in the fight against this scourge of a disease. It is about hope.