Biogen and Eisai make plans to take another Alzheimer’s drug to the FDA

The companies have said their experimental therapy, called lecanemab, slowed cognitive decline by 27% in a Phase 3 clinical trial. The drug also appears to help people with day-to-day functions, like managing their finances, taking care of household responsibilities, and being able to leave their homes, executives said Tuesday during an earnings call.

“Lecanemab administration showed a highly statistically significant reduction in clinical decline as early as six months which expanded over the 18-month study period on an absolute basis, consistent with a disease-modifying effect,” Michel Vounatsos, Biogen’s outgoing CEO, told investors this week.

The new data, which was announced late on Sept. 27, revitalized Biogen’s stock, which closed Sept. 28 at $276.61, a 78% increase over the previous day’s closing price, following the disastrous launch in 2021 of Aduhelm, the controversial treatment for the same disease. 

“Lecanemab could be a commercial success,” SVB Securities analyst Danielle Brill told investors on Tuesday, though she cautioned against viewing the drug as a savior for Biogen. “Given [Alzheimer’s disease] is a lower-margin opportunity, and economics are split with partner Eisai, we think it’s unlikely that lecanemab alone can offset the revenue cliff [Biogen] is facing over the next several years.”

Aduhelm’s failures

Much of Biogen’s stock performance over the last few years has been tied to the therapies the company is developing with Eisai to treat Alzheimer’s disease. Investors first pinned their hopes on Aduhelm, which was approved in 2021.

However, Medicare coverage of the drug, as well as others in its therapeutic class, has been restricted amid broader questions about Aduhelm’s price tag — $56,000 a year at launch, now about $28,200 a year — and about how well it works. The company said in May that it would scrap its commercial plans for the drug and let go of CEO Vounatsos. Aduhelm generated only $1.6 million in sales in the third quarter of 2022 and $4.5 million so far this year. 

Eisai takes the lead

The companies, which have a 50/50 profit-sharing agreement, appear to be taking a different approach with lecanemab. Eisai is expected to share additional data about the drug on Nov. 29 at the Clinical Trials on Alzheimer’s Congress in San Francisco, and it, not Biogen, will be filing for full approval of the drug in the U.S. in the first quarter of next year. It was Biogen that applied for approval of Aduhelm back in 2020.

The Japanese drugmaker is also taking the lead in talks with the Centers for Medicare and Medicaid Services about coverage of lecanemab, Biogen told investors. The FDA is expected to make a decision on accelerated approval as soon as Jan. 6, and that means the therapy would fall under the same rules as Aduhelm, which is considered “noncoverage” because access is limited to patients participating in clinical trials, according to Mizuho Securities analyst Salim Syed.

Biogen also reminded investors during the call that Eisai has final decision-making authority and will set the price for lecanemab.

The company also told investors it is preparing its commercial and manufacturing capabilities to get ready for a launch if and when the drug is approved. A new manufacturing facility in Solothurn, Switzerland, will largely focus on making therapies for Alzheimer’s disease, including lecanemab.  

Biogen’s stock is up 12.7% so far this year, while the broader S&P 500
SPX,
+1.35%
has declined 20.3%.