Biogen shares took a hit Wednesday when the big-cap biotech released ambiguous clinical-trial results for its Alzheimer's disease drug. Big pharma Eli Lilly reported stronger data for its own Alzheimer's candidate, but it remains unclear whether either of these drugs will make it to market.

Biogen's (BIIB) aducanumab was the particular focus of attention. At the Alzheimer's Association International Conference (AAIC), the company reported the effects of aducanumab on patients with mild or prodromal (even earlier than mild) Alzheimer's after 54 weeks of treatment with a 6 mg dose. This rounded out the reportage of Biogen's phase one trial of aducanumab, which initially included 1 mg, 3 mg and 10 mg arms along with a placebo arm.

After the patients in the lower doses showed little effect and the 10 mg group showed better results but worryingly high rates of amyloid-related imaging abnormalities (ARIAs) in their brain scans, Biogen added the 6 mg group in an attempt to split the difference.

Thus, while the 54-week results for the other doses were reported back in March, Biogen had to wait until now for the 6 mg data to mature. In addition to the drug meeting the trial endpoints, analysts were hoping to see a correlation between efficacy and dose, which would be a strong indication that the results are due to the drug.

Biogen stock fell 4.3% to 391.97 Wednesday. Eli Lilly (LLY) rallied from sharp early losses to close up 1% at 86.38.

Both Biogen's and Lilly's drugs are based on the beta amyloid hypothesis, a theory that reducing the beta amyloid plaques seen in the brains of Alzheimer's sufferers will slow the disease's progress.

"Consistent with previously reported results, the 54-week data from the 6 mg/kg (6 milligram dose per kilogram of body weight) arm demonstrated a statistically significant reduction of beta amyloid in the brain," Biogen said in its release. "In exploratory analyses, the 6 mg/kg dose showed an improvement in the slowing of clinical decline, as measured by the Mini Mental State Examination (MMSE) and Clinical Dementia Rating sum of boxes (CDR-SB) scales, which was not statistically significant.

"In a prespecified analysis across placebo and all doses of aducanumab, the slowing of clinical decline was shown to be dose-dependent, and this dose-dependence achieved statistical significance for both scales.

Small Study, Slow Disease

The fact that the clinical benefit failed to reach statistical significance after a year isn't necessarily a deal breaker, according to RBC Capital Markets analyst Michael Yee, given that this is a small study of a slow-acting disease. Biogen had announced it's taking aducanumab straight into phase three, with a giant 1,500-patient study.

But Evercore ISI analyst Mark Schoenebaum pointed out that the dose correlation wasn't perfect.

He emailed to clients: "On MMSE, the 12-month 6 mg data have improved when compared to the six-month data. (Six months looked exactly like placebo; there's now some separation.) However, the 6 mg data is still worse than the 3 mg data, which casts some doubt on the dose response.

"Also, as we think was generally expected, the placebo data changed, which had the effect of slightly shrinking the magnitude of the benefit vs. prior data. However, the benefit still looks robust to us.

Another Unpleasantry

Another unpleasant surprise had to do with the rate of ARIAs. Previous research showed a higher rate of ARIAs among patients carrying the ApoE4 protein, so Biogen analyzed carriers and noncarriers. Again, the rate of ARIAs among ApoE4 carriers was right in between the 3 mg and 10 mg groups (10%). Among noncarriers, the 11% rate in the 6 mg group was a bit higher than in the 10 mg group.

Piper Jaffray downgraded the stock to neutral from buy and lowered its price target on Biogen stock to 410 from 485.

"As Biogen plans to move forward, potentially at the 6 mg/kg dose, Biogen may be sacrificing potential efficacy for limited or no improvement in safety," wrote analyst Joshua Schimmer. "This data set is far from inspiring confidence and in our view is even more speculative than before.

Meanwhile at the AAIC, Eli Lilly reported two-year follow-up data on its phase three trial of solanezumab, its own Alzheimer's candidate.

Since this is a later-stage trial, the data could be used to support an FDA filing.

Lilly is conducting two large studies of the drug, again mainly in mild cases of the disease, called Expedition 1 and Expedition 2.

Wednesday's report was on Expedition-EXT (the extension study), which looked at what happened when patients who'd been in the placebo group started being treated with solanezumab.

This "delayed start" group was compared to the "early start" group to see if they could catch up.

The result found there was still a significant difference in cognition and function between the two groups.

Earlier Start May Benefit

"The data today appear consistent with previously presented extension data and suggests (if solanezumab proves to be effective in treating AD) a potential benefit from the earlier start of treatment and builds the case for the possible disease modification claim on the label," Schoenebaum wrote in another email. "The FDA describes 'a randomized-start design ... (as) a more convincing means of demonstrating' disease modification, but we believe the FDA is still wrestling with this concept.

"Therefore, we view today's data as incrementally positive, but not thesis- or stock-changing."