(Reuters) - Biogen (NASDAQ:BIIB)'s shares rose 2% on Monday as a unanimous backing of its Alzheimer's drug by the U.S. health regulator's advisers strengthened the case for a traditional approval with no major new safety warnings.
The Food and Drug Administration's advisory panel unanimously agreed that a late-stage trial of the drug Leqembi, developed with partner Eisai, verified the benefit of treatment for those at an early stage of the disease.
The vote clears the way for a traditional approval by the agency, months after it gained an accelerated approval in January.
The advisers discussed the risk of using Leqembi in certain patients, like those taking drugs that prevent blood clots and those with a rare condition called cerebral amyloid angiopathy.
The condition causes the protein amyloid, that Leqembi targets, to build up in the walls of arteries in the brain and can cause bleeding.
But the advisers said that those concerns could be managed, and were balanced against the benefits provided by the drug.
"It seems unlikely that the updated FDA label will include additional contraindications," said Stifel analyst Paul Matteis, referring to the written information that accompanies an approved drug.
Traditional approval by the FDA, which is expected by July 6, is likely to expand Medicare payment for the treatment. The FDA generally follows the advise of its independent experts.
The panel considered data from Eisai's confirmatory trial that showed the drug slowed cognitive decline by 27% in early Alzheimer's patients.
At least three brokerages raised their price targets on Biogen's shares after Friday's vote.
The company's shares trade at 4.71 times Wall Street's estimates for sales in the next 12 months, compared with 2.89 for rival Bristol Myers (NYSE:BMY) Squibb and 3.61 times for Gilead Sciences (NASDAQ:GILD).
Biogen's shares were trading at $315.