This article was originally published on ETFTrends.com.
Biotech ETFs rallied Friday after Biogen (BIIB) announced successful results from its Alzheimer's drug trial.
On Friday, large-cap biotechnology sector ETFs lead the charge. The iShares Nasdaq Biotechnology ETF (IBB) increased 3.2%, First Trust NYSE Arca Biotechnology Index Fund (FBT) advanced 2.9% and VanEck Vectors Biotech ETF (BBH) was 2.8% higher.
Meanwhile, BIIB shares surged 16.9% Friday. BIIB makes up 7.9% of IBB, 3.6% of FBT and 5.5% of BBH.
Biogen shares jumped Friday after the biotech firm and Eisai announced positive results from a Phase II study with BAN2401, an anti-amyloid beta protofibril antibody, in 856 patients with early Alzheimer's disease, CNBC reports.
Biogen's Overweight Rating
J.P. Morgan told clients the announcement is a good sign for the Biogen, reiterating an overweight rating for the company stock.
“Bigger picture, the data today adds to our confidence that there may indeed be a correlation between amyloid beta levels and cognitive functioning which, in our view, positions BIIB nicely for a potentially substantial wave of anticipation trade well ahead of the future binary aducanumab readouts (as we believe prevailing levels reflect minimal contribution from Alzheimer’s),” J.P. Morgan analyst said in a note.
BAN2401 is one of a number of drugs that target beta amyloid, a protein that forms brain plaques that many believe are an underlying cause of Alzheimer's. There are currently no treatments that can slow the progression of Alzheimer’s. Current drugs only ease some of the symptoms.
“This is really the first large study in which [plaque] reduction correlated with a reduction in cognitive decline,” Dr. Lynn Kramer, chief medical officer of Eisai, said, according to StatNews. “And that’s a very important correlation.”
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