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Cogstate (ASX:CGS) has become the latest ASX health stock to gain from an FDA green light even though it is only indirectly involved – right now.

Overnight the US regulator approved the first Alzheimer’s therapy since 2003 and the first drug that has been shown to slow the disease itself rather than just treating symptoms.

Namely, a drug by US biotech Biogen which is marketed under the name Aduhelm.

What does Cogstate have to do with this?

Cogstate is partnered with a Japanese pharmaceutical company Eisai and Eisai is partnered with Biogen.

Cogstate first partnered with Eisai in October last year whereby Eisai had exclusive rights to develop and distribute Cogstate’s digital cognitive assessment technologies.

Cogstate today told shareholders that “it is expected that such digital cognitive assessments will play an important role in supporting the types of large-scale cognitive assessment that will be necessary in the launch of disease modifying therapies such as Aduhelm”.

It also said Aduhelm’s approval means Eisai no longer has the right to accelerated termination after the fifth year of the deal and it is now contractually obligated to make minimum royalty payments for five years thereafter – equating to at least US$20 million.

Cogstate shares rose by nearly 60 per cent today.

Biogen’s (NDQ:BIIB) shares also rose overnight – by 38 per cent, capitalising the company at US$59.6 billion.