Biogen Inc (BIIB) shares are up sharply Friday after the company announced a delay in the FDA decision for its Alzheimer's treatment candidate, aducanumab.

What Happened: The FDA has extended the review period for the biologic license application for aducanumab by three months, Biogen and Eisai Co., Ltd (ESALY) said in a statement.

Biogen is co-developing aducanumab with the Japanese pharma company.

Biogen, the sponsor of the BLA, said it submitted a response to an information request by the FDA that included additional analyses and clinical data. The regulatory agency, deeming the submission as a major amendment to the application, extended the review period to give time for review.

The PDUFA goal data now stands postponed from March 7 to June 7.

Why It's Important: The positive stock reaction to the delay in a decision is apparently a relief rally, as investors were positioning for a rejection following a negative Adcom verdict issued in early November.

After nearly shelving the development of aducanumab for Alzheimer's disease, Biogen resurrected the clinical program following a subset analysis of data.

The company made regulatory submission in July and the FDA accepted the application for priority review in August, assigning a PDUFA goal date of March 7.

Analysts are optimistic that the drug will ultimately clear the regulatory hurdle, given there is a serious unmet need and that there are no FDA-approved therapies to treat the disease per se.

In premarket trading, Biogen shares were advancing 11.69% to $299.18 and Eisai was advancing 3.26% to $77.05.