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Biogen (BIIB) Buys Stroke Candidate Cirara for $120M

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Biogen Inc.(BIIB - Free Report) announced the acquisition of New York-based private pharma company Remedy Pharmaceuticals’ phase III candidate, Cirara for an upfront payment of $120 million. Cirara is being evaluated for the treatment of large hemispheric stroke (LHI).

Shares were up almost 1.5% on Monday in response to the news. However, this year, Biogen’s shares have declined 8.9% so far, while the Zacks classified Biomed-Genetics industry recorded an increase of 1.3%.

LHI is a severe kind of ischemic stroke where cerebral edema often leads to stroke-related death. In proof-of-concept studies, Cirara has shown the potential to reduce brain swelling, disability and the death risks in patients with LHI. Incidentally, Cirara enjoys Orphan Drug designation for severe cerebral edema in patients with acute ischemic stroke.

Per the terms of the deal, Remedy will share the development cost of Cirara and will also be entitled to potential milestone and royalty payments.

The acquisition is in sync with Biogen’s efforts to diversify its pipeline beyond the multiple sclerosis market tothe neuroscience/neurologic diseases area.

The company holds a strong position in MS market with a wide range of products. However as competition intensifies there, Biogen tries to diversify its pipeline and aims to be a leader in the neuroscience/neurologic diseases area.

Biogen is looking to strengthen its Alzheimer’s disease (AD) and other neurodegenerative disorders pipeline. Biogen’s AD pipeline comprises candidates with different mechanisms of action including anti-tau (BMS-986168) and anti-amyloid (aducanumab) candidates as well as a BACE inhibitor (elenbecestat) program. We remind investors that Biogen licensed the anti-tau candidateBMS-986168from Bristol-Myers Squibb Company (BMY - Free Report) , per a deal announced last month.

The Dec 2016 FDA approval of Biogen and partner Ionis Pharmaceuticals, Inc.’s (IONS - Free Report) spinal muscular atrophy (SMA) treatment, Spinraza (nusinersen), consolidated its position in the neurological disease market with the drug being the first and only treatment to be approved in the U.S. for SMA.

The acquisition of Cirara complements Biogen’s ongoing development efforts in stroke. Biogen has another drug in development, called natalizumab which is being evaluated in a phase IIb study to improve its functional outcomes by limiting brain inflammation after strokes.

Biogen carries a Zacks Rank #3 (Hold). A better-ranked stock in the pharmaceutical sector is Akari Therapeutics, Plc (AKTX - Free Report) with a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here. Shares of Akari Therapeutics have risen 28.4% this year so far.

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