Our Take: Aduhelm torpedoed Biogen. Will lecanemab — or a new CEO — come to the rescue?
In an effort to further attenuate the fallout following the FDA’s contentious accelerated approval last June of the Alzheimer’s treatment Aduhelm (aducanumab), Biogen revealed Tuesday that it is taking additional — and substantive — steps, including replacing Michel Vounatsos, the company’s CEO since 2017.
Late last year, Biogen cut Aduhelm’s $56,000 price tag in half and said the company would implement a series of cost-cutting measures after the drug failed to gain traction. (It generated sales of just $3 million through the end of 2021.)
At the time, Biogen estimated that those cost-reduction measures would save half a billion dollars and that most of those savings would be realized this year.
Then, in January, CMS all but doomed the drug when the agency proposed limiting Medicare coverage of Aduhelm to only patients enrolled in approved clinical trials, a limitation that remained unchanged in the final national coverage determination CMS issued a few weeks ago.
Salim Syed, a senior biotechnology analyst with Mizuho Americas, said when Biogen reported its fourth-quarter results in early February that he wondered how long the company could market a drug with a negative net present value “before the fiduciary duty kicks in to shut down the program,” FiercePharma reported.
Apparently, Syed now has his answer.
Although Biogen said it is not giving up on the drug, the firm is essentially eliminating Aduhelm’s commercial infrastructure, including the sales team. This latest round of cost-cutting steps is expected to save another half a billion dollars.
The company also said it will revamp its pipeline to diversify and rebalance its risk, though neuroscience will continue to be a focus. Dr. Priya Singhal, Biogen’s interim head of research and development, said the firm is “open to adjacencies” such as neuropsychiatry and immunology, although she said the company is still “highly, highly committed to Alzheimer’s disease,” according to FierceBiotech.
One late-stage candidate in the pipeline is zuranolone, a potential treatment for major depressive disorder and postpartum depression that Biogen is co-developing with Sage Therapeutics. Other candidates in the pipeline include therapies for amyotrophic lateral sclerosis (ALS), systemic lupus erythematosus, neuropathy and neuralgia, Parkinson’s disease, multiple sclerosis, cognitive impairment associated with schizophrenia, and stroke.
Yet it’s another treatment for Alzheimer’s disease in Biogen’s pipeline that analysts will be watching most closely the next several months. As the follow-up to Aduhelm, lecanemab could largely determine Biogen’s fate.
Biogen is co-developing lecanemab with Eisai. Although the two companies also partnered on Aduhelm, Biogen led the clinical development, regulatory approval process and commercial rollout. Eisai basically walked away from that partnership in March, handing Biogen the sole decision-making and commercialization rights to Aduhelm.
With lecanemab, Eisai is leading the drug’s clinical development and regulatory approval process. The FDA granted lecanemab fast track status in December, and the rolling submission will likely be completed next month, after mid-stage trial results become available. Eisai and Biogen also expect to have results from an ongoing Phase III trial of lecanemab, called Clarity AD, in September. If the results show a definitive clinical benefit, the companies may use that data to support a request for full approval of lecanemab early next year.
If lecanemab does gain full approval, it could be eligible for broader coverage than Aduhelm under the national coverage policy CMS issued last month. In that scenario, Biogen has a chance of righting the ship.
In the meantime, Vounatsos will stay on as CEO until his successor is named.
It should also be noted that Eli Lilly is awaiting late-stage clinical data for its own Alzheimer’s drug candidate, donanemab. Those results are expected around the same time as the Phase III data for lecanemab, so there could be a race to the finish line between the two.
In related news, UnitedHealthcare updated its medical benefit policy for Aduhelm last week, stating in the coverage rationale that “Aduhelm is unproven and not medically necessary for the treatment of Alzheimer’s disease due to insufficient evidence of efficacy.”
Effective June 1, UnitedHealthcare’s commercial plan members will only have coverage for the drug if they are enrolled in a clinical trial and have received prior authorization.
Our Take: For nearly a year, Aduhelm — and, by extension, Biogen — has been in the news for all the wrong reasons. It’s easy to see why Biogen wants to begin a new chapter.
Even though the company is trying to appease shareholders by slashing costs and searching for a new chief executive, the consensus among analysts appears to be that these steps may not be enough.
Citing a survey by RBC Capital Markets, FiercePharma reported that 40% of Biogen’s investors indicated they want the new CEO to have a solid track record in business development, whether through in-licensing or acquisitions. Investors were also interested in a CEO with experience in cleaning up and selling companies, suggesting that Biogen itself could become the targeted asset of a buyout.
The company has between $5 billion and $6 billion in cash that it could use to secure other drug candidates. But, as Healthcare Dive noted, while that amount may be enough to enter into other research collaborations or licensing agreements, it may be inadequate for “a transformational deal.”
Unless the Clarity AD trial yields some impressive results for lecanemab, it looks as though Biogen’s future options may be even more limited than Medicare’s coverage of Aduhelm. It could eventually come down to this: buy big, or be bought.
Co-founders of MissingLogic®, Michelle Troseth and Tracy Christopherson, take the mic with John on this week’s Health Care Rounds. They discuss the necessary framework to effectively combat burnout, leading health care organizations through meeaningful and transformative change. Tune in for an inspiring conversation around the management of complexities in healthcare, and how this duo is using an innovative approach to create positive and healthy work environments throughout the industry. Listen here or wherever you get your podcasts.
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