Biogen has seen $19 billion wiped out since a promising drug flopped - and one analyst has a bold idea for how the biotech pioneer can recover

Glassdoor/Biogen

The biotech Biogen is based in Cambridge, Massachusetts.

• The biotech Biogen had a massive failure last month, when it abruptly stopped research on a highly anticipated Alzheimer's disease drug.
• Biogen has lost nearly a third of its market value, but hasn't said much about changing its strategy.
• Investors want to know if the biotech can get out of its other Alzheimer's partnership, Mizuho analyst Salim Syed says - and it should, depending on how much that would cost it.
• See the latest Biogen stock quote here.

Last month, when the biotech Biogen yanked a once-promising experimental Alzheimer's disease drug, it sent a ripple across the scientific and financial worlds.

The drug, aducanumab, had been heavily anticipated, including by Biogen's investors. After the news, Biogen's market value plummeted by nearly a third, and hasn't recovered much since. The company's market value now stands at about $44 billion, down almost $19 billion.

Biogen had been developing aducanumab with the Japanese pharmaceutical company Eisai. It also has a partnership with Eisai for two other Alzheimer's disease drugs.

Now, Mizuho analyst Salim Syed says there's just one question investors are focused on: Can the company get out of its other Eisai partnerships for Alzheimer's drugs? Biogen should exit the ventures, depending on how much that would cost, Syed said.

Biogen "could probably find better assets to put money behind," he wrote in an email to Business Insider. "The company needs to be decisive at this point and make some moves."

Exiting the Eisai partnership would be a good first step for Biogen, showing the company can make better use of its funds, he said.

"The underlying premise is a practical one, insofar that investors generally want to know what the path forward is for BIIB in a post-Aducanumab failure world and if the company plans on putting what is likely good money after bad," he said in a note to investors.

Cambridge, Massachusetts-based Biogen is a biotechnology pioneer, known for taking big risks. Besides Alzheimer's disease, the company is developing drugs for stroke, multiple sclerosis, Parkinson's and more.

The biotech does have five Alzheimer's drugs it's still working on, and the two furthest-along ones are partnerships with Eisai that date back to 2014.

Competitive challenges have also compounded the company's recent failure. After Biogen reported financial results this morning, Wall Street analysts peppered management with questions about aducanumab and what other drugs it's working on. But the company didn't say much about whether it's going to make any changes, and the stock slumped about 2%.

Mizuho's Syed spoke with Biogen after the investor conference call, but Biogen "isn't divulging details if there is an out for them in the collaboration agreement," he said. Moreover, those details aren't public at all, he said.

But the company did emphasize that it is analyzing results of the recent late-stage research trials of aducanumab, as well as for another Alzheimer's disease drug, and that those will shape its thinking.

"To me this implies there is an out of some sort (which is standard) ... the question is if there is a penalty (and how much it is)," Syed said in a note to investors..