Shares of Biogen soared nearly 30% on Tuesday after the drugmaker announced it was seeking regulatory approval for an Alzheimer's drug, aducanumab, it said it was giving up on earlier this year.

"It would be the biggest drug ever," CNBC's Jim Cramer said on "Squawk on the Street."

The announcement comes just months after Biogen discontinued clinical studies of the same drug following a data analysis that did not achieve its objective. Shares of Biogen sold off in March after stopping the trials as Wall Street was expecting this drug to be the company's next big source of revenue.

Biogen erased its entire 25% year-to-date decline when it said a new analysis of a larger dataset showed that aducanumab "reduced clinical decline in patients with early Alzheimer's disease." Patients who received the drug "experienced significant benefits on measures of cognition and function such as memory, orientation, and language."

Biogen plans to file for approval of aducanumab with the FDA in early 2020.

"With such a devastating disease that affects tens of millions worldwide, today's announcement is truly heartening in the fight against Alzheimer's," Michel Vounatsos, chief executive officer of Biogen, said in a release. "We are hopeful about the prospect of offering patients the first therapy to reduce the clinical decline of Alzheimer's disease and the potential implication of these results for similar approaches targeting amyloid beta."

"You have the No. 1 drug of all time, potentially," said Cramer.

While Alzheimer's effects about 50 million people globally, there are no approved therapies to slow or reverse the effects of the disease.

"The whole concept of senior living will change," added Cramer. "You know who's going to take this drug?" asked Cramer. "Everyone."

Before the announcement, Biogen reported third-quarter earnings that topped Wall Street expectations. Profit rose 7.1%, boosted by higher demand for its rare muscle drug Spinraza and total revenue rose about 5%.

The drugmaker reported earnings per share of $9.17 on revenue of $3.60 billion. Analysts had forecast earnings of $8.27 per share on revenue of $3.539 billion.

Shares of Biogen closed up 26% on Tuesday.

— Reuters contributed to this report.

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