Biogen jumps 6% ahead of a key FDA decision for its Alzheimer's drug

• Biogen surged as much as 6% on Friday ahead of a key FDA decision on its Alzheimer's drug.
• The FDA is set to decide on Monday if Biogen's aducanumab should be approved for the treatment of Alzheimer's disease.
• Monday's decision is "the mother of all binary events," JPMorgan said in a Tuesday note.
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Shares of Biogen surged as much as 6% on Friday ahead of a key FDA decision that will determine the fate of the pharmaceutical company's Alzheimer's drug candidate, aducanumab.

Based on a previous FDA panel vote in late 2020, the decision could result in a wild price swing for Biogen's stock.

JPMorgan analyst Corey Kasimov said in a note on Tuesday that the upcoming PDUFA decision is "the mother of all binary events."

In a note from last month, Kasimov said a positive decision from the FDA could send shares soaring to $400, whereas a negative decision could send shares plummeting to $200. Biogen traded around $288 late Friday afternoon.

The second phase 3 trial for aducanumab failed to meet its primary endpoints in 2019, but the company kept working on data analysis and trial designs for the drug in hopes of receiving approval from the FDA.

In November, the FDA's Peripheral and Central Nervous System Drugs Advisory Committee voted 8-1 that data from Biogen's Phase 3 EMERGE study evaluating aducanumab in patients with mild Alzheimer's disease was not enough to show efficacy. That decision led to a swift 30% decline in the stock.

But because there's currently no treatment for Alzheimer's, it's anyone's guess what the FDA will decide, according to Kasimov.

"Our baseline view is that the data package is insufficient, and with almost any other indication, we suspect regulators would be asking for another confirmatory trial pre-approval…but this isn't any other indication. It's Alzheimer's. And the unmet need is rather unprecedented," Kasimov said.