Just one word caused a stock to rise more than 60% in one day.
It’s what happened earlier this week when the Food and Drug Administration signed off on Biogen Inc.’s (Nasdaq: BIIB) new Alzheimer’s drug Aduhelm.
Pro tip No. 1: I talked about the impact of this specific approval on Biogen and the broader biotech sector in a recent podcast. You can listen to that here.
However, an independent panel of medical experts did not endorse the finding, calling drug trial data “unconvincing.”
Regardless of that criticism, this special consideration was a huge boost for Biogen’s stock price.
In today’s episode of The Bull & The Bear, chief investment strategist Adam O’Dell, Green Zone Fortunes co-editor Charles Sizemore and I talk about Biogen’s recent approval and how “novel” drugs can give biotech stocks a leg up … and give substantial profit to investors.
The “Novel” Drug Craze
You might think Biogen’s Alzheimer’s treatment is “novel” because the FDA hasn’t approved a treatment for Alzheimer’s since 2003.
But there’s more to it than that.
According to the FDA, novel drugs serve an unmet medical need or help advance patient care and public health, and, as the first approved drug that targets the underlying pathophysiology of the disease, Aduhelm does just that.
“Novel” Drug Approvals on the Rise
Data from the Food and Drug Administration shows that, in 2020, the government approved 53 novel drugs.
That’s the second-highest annual total in 12 years.
Before 2018, the average number of novel drugs approved by the FDA was 32.
Gaining approval for a novel drug can be good and bad for a biotech company.
In this episode of The Bull & The Bear, we’ll dive deeper into that question and tell you what novel drugs mean for biotech stocks and their investors.
The Bull & The Bear
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Matt Clark, CMSA®
Research Analyst, Money & Markets
Matt Clark is the research analyst for Money & Markets. He is a certified Capital Markets & Securities Analyst with the Corporate Finance Institute and a contributor to Seeking Alpha. Prior to joining Money & Markets, he was a journalist and editor for 25 years, covering college sports, business and politics.