Insights

Why the Cogstate (ASX:CGS) share price is rocketing 73% higher

The first new treatment approved for Alzheimer’s disease since 2003 is giving this healthcare technology company a boost…
The post Why the Cogstate (ASX:CGS) share price is rocketing 73% higher appeared first on The Motley Fool Australia. –

The Cogstate Limited (ASX: CGS) share price is rocketing higher on Tuesday morning.

At the time of writing, the neuroscience technology company’s shares are up 73% to $1.60.

Why is the Cogstate share price rocketing higher?

Investors have been bidding the CogState share price higher on Tuesday following a very positive development.

According to the release, Eisai and its development partner, Biogen, have announced that the U.S. Food and Drug Administration (FDA) has granted Accelerated Approval for aducanumab for the treatment of Alzheimer’s disease.

The accelerated approval has been granted based on data from clinical trials demonstrating the effect of aducanumab on reducing amyloid beta plaques. This is a biomarker that is believed to predict clinical benefit, which in this case is a reduction in clinical decline.

The release advises that under the accelerated approval conditions, which provide patients suffering from the disease earlier access to treatment, Biogen will conduct a controlled trial to verify the clinical benefit of the drug in patients with Alzheimer’s disease.

This is the first new treatment approved for Alzheimer’s disease since 2003 and is the first approved therapy that targets the fundamental pathophysiology of the disease.

However, if the Biogen trial fails to verify clinical benefit, the FDA may initiate proceedings to withdraw approval of the drug.

How does this benefit Cogstate?

Cogstate stands to benefit from this development due to its agreement with Eisai. That agreement gives the Japan-based pharmaceutical company the rights to exclusively develop and distribute Cogstate digital cognitive assessment technologies in healthcare and other markets worldwide.

The release explains that following the approval of aducanumab by the FDA, Eisai no longer has the right to accelerated termination of the Cogstate-Eisai agreement. Therefore, in addition to the minimum contractual royalty payments over commercial years 1-5 of US$10 million, Eisai is now also contractually obliged to make the minimum royalty payments to Cogstate over commercial years 6-10. This will mean an additional aggregate payment of US$20 million over that period.

The Cogstate share price is now up 385% over the last 12 months.

The post Why the Cogstate (ASX:CGS) share price is rocketing 73% higher appeared first on The Motley Fool Australia.

Wondering where you should invest $1,000 right now?

When investing expert Scott Phillips has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for more than eight years has provided thousands of paying members with stock picks that have doubled, tripled or even more.*

Scott just revealed what he believes could be the five best ASX stocks for investors to buy right now. These stocks are trading at near dirt-cheap prices and Scott thinks they could be great buys right now.

*Returns as of May 24th 2021

More reading

Why the Creso (ASX:CPH) share price is racing 6% higher
Macquarie and Nuix face ASIC investigation: report

Tesla Plaid is so good Elon Musk says the Plaid+ is cancelled

Ansell (ASX:ANN) share price lower despite CEO appointment
Breakdown in gold and inflation link leaves more questions than answers

James Mickleboro does not own any shares mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

Trade The World Anywhere & Anytime!

Mobile app platform with over 50,000 global listed securities across 12 markets (over 70% global market capitalisation), right from your Android or iOS device.

Integrated with exclusive trading idea and investment analysis tools to help you find actionable insight on virtually every financial instrument across our 12 global markets, to help you optimise your trading strategies.

Refer Your Friends

Tell your friends about Monex and gift them FREE access to our trading tools.

We respect your privacy and will only send this one email notification to your friends. 

Share With Your Friends

Share on facebook
Share on twitter
Share on linkedin

Monex Trading Tools Access and Usage Terms

The Monex Trading Tools (referred to as ‘tools’ hereafter) are available to you inside your client portal;


To activate access to the tools, you must have a verified and approved trading account and have made a deposit of at least AUD $1000.


An active and funded account with a positive trading balance is required to continue to have access to the tools;


Although the tools are available to you indefinitely, Monex Securities may at it’s discretion disable access to the tools in the future;


Monex securities reserves the right to change these terms and conditions from time to time, as it sees fit, without notice.

Important Notice
iOS & Android App - 12 International Markets & Over 70% Global Market Cap. $0 Brokerage On US Trades. Click Here!