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Biogen to Buy Mid-Stage Neuropsychiatry Asset From Pfizer

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Biogen Inc. BIIB has agreed to acquire a phase IIb ready candidate, PF-04958242, which is being developed for cognitive impairment associated with schizophrenia (CIAS) from pharma giant Pfizer, Inc. PFE.

For the deal, Biogen will make an upfront payment of $75 million to Pfizer along with which the latter will also be entitled to up to $515 million in development/commercialization milestone payments and potential royalties.

In the latter half of the year, Biogen will initiate a phase IIb study on PF-04958242 to determine if the AMPA receptor potentiator is safe and effective in the treatment of cognitive dysfunction in schizophrenia patients.

Schizophrenia patients often experience significant deficits in cognitive function – the ability to make sense. The majority of more than 20 million people living with schizophrenia worldwide witness some degree of cognitive dysfunction, according to Biogen’s press release. However, this negative symptom of schizophrenia has been particularly difficult to treat.


Biogen’s shares have declined 12.1% this year so far, underperforming the industry’s rise of 3.1% in the same time frame.

The deal, which marks Biogen’s entry into the emerging market for neuropsychiatry, is in sync with its strategy to diversify its pipeline beyond its core therapeutic area – multiple sclerosis – to neurodegenerative disorders. Last year, Biogen added seven new clinical stage programs to its neuroscience pipeline through advancing internal pipeline candidates as well as through external deals.

Biogen’s Alzheimer’s disease (AD) pipeline comprises candidates with different mechanisms of action including anti-tau candidate (BIIB092 – with potential in AD as well as progressive supranuclear palsy (PSP)), anti-amyloid (aducanumab) candidates as well as a BACE inhibitor (elenbecestat) program.

Meanwhile, Biogen’s spinal muscular atrophy (SMA) treatment, Spinraza (nusinersen), approved in late 2016, has consolidated its position in the neurological disease market with the drug being the first and only treatment to be approvedin the United States for SMA. The market potential of the disease is huge. The drug has performed beyond expectations so far, witnessing strong patient uptake in the United States and internationally.

In December last year, Biogen formed a new collaboration with Ionis Pharmaceuticals, Inc. IONS to identify antisense oligonucleotide drug candidates for the treatment of SMA. Biogen will have the option to license therapies arising out of this collaboration. Also, Biogen plans to start phase I study on a gene therapy asset for SMA by mid-2018.

Biogen is also building a portfolio of best-in-class treatments for stroke and acute neurology. In Maylast year, Biogen purchased a phase III candidate, BIIB093/Cirara from Remedy Pharmaceuticals, which is being studied for the treatment of large hemispheric stroke (LHI), a severe form of stroke with no available therapy.

Biogen carries a Zacks Rank #3 (Hold). A better-ranked stock in the biotech sector is Ligand Pharmaceuticals Incorporated LGND which carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Ligand’s earnings per share estimates have moved up by 9.8% for 2018 and 21% for 2019 in the last 30 days. The company delivered a positive surprise in three of the trailing four quarters with an average beat of 24.88%. Share price of the company has surged 71.1% in the past year.

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