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Biogen (BIIB) Alzheimer's Drug Aduhelm Sees Slow Launch, Stock Down

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Biogen’s BIIB shares were down almost 7% on Thursday, Sep 9, after it stated at the Morgan Stanley Global Health Care Conference that the launch of its Alzheimer’s disease drug, Aduhelm (aducanumab), is not going too well. The launch is facing some near-term challenges.

So far this year, Biogen’s shares have risen 22.6% compared with the industry’s increase of 1.2% in the same time frame.

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The FDA approved Aduhelm on an accelerated basis in June. It is used for reducing the accumulation of amyloid beta plaques, a sticky protein, in the brain, which is believed to lead to the progression of Alzheimer’s disease.

In July, the FDA approved an update to the label of Aduhelm. The updated label mentions that Aduhelm treatment should be initiated in patients with mild cognitive impairment due to Alzheimer’s disease or mild Alzheimer’s dementia. For earlier or later stages of the disease, there is no safety or effectiveness data available to support initiating treatment with Aduhelm. The purpose of the label update was to clarify the patient population that was studied across the ENGAGE and EMERGE phase III studies and the phase Ib PRIME study, based on which Aduhelm was approved.

Aduhelm became the first medicine to be approved for reducing the clinical decline associated with this disease and targeting the underlying cause of it. Prior Alzheimer’s drugs did not lower the amyloid plaque, which Biogen claims is the key difference between earlier drugs and Aduhelm. Aduhelm is expected to bring in huge revenues for Biogen if it is successfully commercialized given the strong demand. Aducanumab is also under review in the EU, Japan, and some other countries. The drug recorded sales of $1.6 million in the second quarter of 2021.

However, Aduhelm’s FDA approval faced a lot of criticism regarding its mixed efficacy results, the federal agency’s selection of the accelerated approval path, and the regulatory process in general. Aduhelm also comes with a hefty price tag of $56,000 a year, which was widely condemned. The FDA approved Aduhelm despite an FDA advisory committee voting against its approval in November last year due to mixed outcomes data from ENGAGE and EMERGE phase III studies.

It looks like all these issues and uncertainty with respect to reimbursement have affected the drug’s demand, which likely resulted in a slower-than-expected launch. Biogen’s chief executive officer Michel Vounatsos said at the conference that the “confusion, misinformation and controversy” surrounding the drug’s clinical data and approval process is responsible for the slower-than-expected launch. At the Morgan Stanley conference, Biogen said that only about 50 sites across the country are infusing Aduhelm. In July, Biogen stated that several large treatment sites like Cleveland Clinic have said they will refrain from administering Aduhelm to patients for now.

Biogen said it will now focus on three priorities rather than improving near-term revenues. The company has submitted the manuscript on the phase III data for review by regulatory authorities to improve the understanding of its current data. It is also advancing three studies to generate additional data, expediting the development of the necessary infrastructure, and working to secure reimbursement for the drug. Biogen believes that the long-term opportunity for Aduhelm remains significant as it is seeing a very high level of physician and patient interest.

On Thursday, Eli Lilly’s LLY shares declined 5.9% as it also has an investigational antibody for Alzheimer’s, donanemab, in its portfolio. Lilly plans to submit a biologics license application (BLA), seeking accelerated approval for the candidate for treating Alzheimer's disease later this year. Other companies that have Alzheimer’s candidates in their pipeline in late-stage/mid-stage development are Cassava Sciences SAVA and Annovis Bio ANVS.

Biogen currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here


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