Biogen climbs higher on Spinraza sales; inks deal for two new neuromuscular drugs

Biogen is climbing on the Nasdaq Tuesday morning following news that it’s acquired two early-stage drugs for neuromuscular disorders, adding to the company’s pipeline of potential payouts.

The announcement came wrapped in the biotech giant’s second quarter financial statements, which also noted Biogen’s Spinraza sales had climbed to $423 million in Q2, more than double the second quarter figure in the same period last year.

Michel Vounatsos, Biogen CEO

While sales could easily have spiked the company’s stock — which is up 7.5% in pre-market trading — it’s also possible investors are happy to see Biogen adding R&D projects to its queue. The financial statement noted Biogen was buying two drugs from Thousand Oaks, CA-based AliveGen. Biogen could pay up to $562.5 million for the two drugs if all milestones are met. Upfront, however, the company only wrote a check for $27.5 million.

In exchange, it’s getting a Phase Ia drug called ALG-801 (now known as BIIB110) and preclinical candidate ALG-802. Biogen says the two drugs “represent novel ways of targeting the myostatin pathway, which is one of the most thoroughly studied approaches for muscle enhancement.” Both drug candidates are recombinant proteins that act as ActRIIB ligand traps to inhibit myostatin pathway signaling. Biogen said their targeted mechanism of action might deliver better efficacy and safety than other myostatin approaches.

To start, Biogen plans to study both drugs in spinal muscular atrophy (SMA) and amyotrophic lateral sclerosis (ALS).

This purchase comes just a few weeks after Biogen announced a smaller deal, when it picked up an option on a thrombolytic agent that could protect acute ischemic stroke patients. That deal was with TMS, a company led by Professor Keiji Hasumi’s team of scientists from Tokyo University of Agriculture and Technology. For that, they paid $18 million upfront with $335 million in milestones.

Analysts have been waiting for Biogen to do something that can whip some enthusiasm for the company’s pipeline, which has been light on near-term stock catalysts. These deals probably aren’t it, but they do underscore the company’s plodding strategy for adding on new drugs to the pipeline.

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