Updates share movement, adds analyst comment in paragraphs 6,7, executive comment in paragraph 9

By Kamal Choudhury

May 14 (Reuters) - Biogen BIIB.O said on Thursday it would move its experimental Alzheimer's drug into late-stage development after a mid-stage study showed it slowed cognitive decline and reduced a key brain protein linked to the disease.

Its shares, however, dropped nearly 5%, after the drug, diranersen, missed the trial's main goal of showing that higher doses worked better than lower doses on a standard scale used to track dementia severity at 76 weeks.

Diranersen works by blocking the production of tau, a protein that builds up in the brains of Alzheimer's patients and disrupts communication between brain cells while contributing to cognitive decline.

Patients who received the drug showed meaningful reductions in tau levels across all three doses tested. They also showed signs of slower cognitive decline, with the strongest effect seen at the lowest dose, Biogen said.

The drugmaker did not provide any details on the magnitude of the effect.

The data is "not a worst-case outcome, but leaves much to be desired," said Bernstein analyst Christian Moore, flagging concerns over "no quantitative results" in the update.

"We view this update as a net-negative."

BIOGEN CONFIDENT IN DATA

The 18-month mid-stage study enrolled 416 participants with mild cognitive impairment, who had previously not received anti-amyloid therapy.

Wall Street analysts said while the possibility of a cognitive benefit was encouraging, the lack of detailed data leaves questions unanswered.

"We have always indicated that, this is a new space, and it was our expectation that the data would be complicated. So we're not surprised," Biogen's head of clinical development for MS, immunology and Alzheimer's disease Diana Gallagher told Reuters, adding that the data gives the company confidence to move forward.

Biogen said it would present full data from the study at a medical conference later this year.