Score one for Biogen. 

Massachusetts-based Biogen Inc. (BIIB - Get Report) and Japanese pharmaceutical group Eisai Co. Ltd.  (ESALY) announced positive results of the Phase 2 of the study of their joint beta-amyloid antibody BAN2401, marking an important milestone in the companies' quest to tackle Alzheimer's disease.

Biogen soared more than 19% in Friday trading, while Eisai jumped 21% for the day.

Biogen shared positive results treating 856 patients with early Alzheimer's disease over a period of 18 months. Still, this is only Phase 2 of the trial and there are regulatory obstacles to overcome. The real test will be in Phase 3, which the final stage before regulatory approval.

"It is important to remember that this is only Phase 2 data and while encouraging, it is not the first time an Alzheimer's drug that gotten past this hurdle," says Bret Jensen, Real Money contributor and biotech investor. "Every other company has blown up in Phase 3 development."

The history of trying to cure Alzheimer's is full of mistakes and false promises. "Other compounds targeting amyloid pathology have had to be abandoned after initial promise," Jensen notes.

Biogen had to curtail its own plans for a quick move into Phase 3 development when initial mid-stage results for this compound were not as encouraging as hoped late last year.

Investor Confidence

Investors should view the stock as a good buy, says Sumant Kulkami, an analyst for CanAccord Genuity, because the positive news should draw interest to Biogen's other ongoing trials, including Aducanumab, another Alzheimer's drug.

"Given the significant concerns about Aducanumab since the blinded sample size increase, the fact that another amyloid agent that reduces plaque can achieve positive cognition results should increase investor confidence in the Phase 3 Aducanumab program," says Morgan Stanley's Matthew Harrison in a research note on Friday.

Biogen partnered with Eisai Co. Ltd in 2014 to develop Ban2401 and a second drug E2609.

"We believe this nugget of good news (or perhaps the lack of further bad news) on the amyloid hypothesis could generate further enthusiasm around Aducanumab's Phase 3 results," Kulkami said in an investment analysis released Friday.

It doesn't hurt that Biogen has been on a winning streak: the sales of its money-making Tecfidera rose 2.8% in the last week of June according to Symphony Health Solutions. Tecfidera made up 32% of its revenue in the first quarter.

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