Biogen Inc (NASDAQ:BIIB) has priced its newly approved Alzheimer’s drug aducanumab much higher than expected, broker Credit Suisse said in a note today, with analysts suggesting a resurgence of new product development into the disease will follow as a result
Shares in the US firm rocketed when the US Food and Drug Administration approved the treatment on Monday capping a remarkable resurgence in fortunes both for the drug and Biogen.
Biogen had stopped a phase III trial in March 2019 on a recommendation it would not meet its final endpoint, only to start it again in October after reviewing the data further.
An FDA advisory committee had also said the drug should not be approved, with the agency unusually going against the recommendation.
In granting approval, the US regulator said it wanted more trial work done through confirmatory studies though the company has nine years to complete these.
Credit Suisse noted it is the first approval for a new Alzheimer’s therapy since 2003 and that the pathology of the disease remains poorly understood.
A long-standing hypothesis has been that removing amyloid brain plaques may lead to a cognitive/functional benefit but multiple drugs have tried this approach and failed, it said.
Amyloid beta (Abeta) products presume these plaques are directly related to later stages of the disease and if they are treated early those later symptoms might not occur.
“We view the approval of Aduhelm/ aducanumab as the FDA supporting the Abeta approach despite a lack of robust and consistent positive clinical studies,” said the broker.
The drug has a list price of US56,000/year, which is much higher than its previously published assumptions said Credit Suisse, while the FDA has not placed a limit on treatment duration, which may mean patients remain on therapy for many years.
The key for Biogen now is how quickly insurance companies agree to pay for its use and in what areas of treatment.
Aducanumab was studied in patients with early disease who test positive for a component of amyloid brain plaques, but the FDA approval is for a broad label, which means the treatable population could be larger than anticipated.
Credit Suisse, though, suggests a national coverage determination may take some years, meaning aducanumab may not be commercially relevant until 2023/24 under Medicare.
However, the broker notes that Biogen is confident on early coverage and is in the final stages of concluding a deal with the Veterans Administration.
Wall Street analysts are now estimating peak annual sales for the drug of up to US$50bn though Japanese partner Eisai has rights to 55% of US profits and 80% in Japan and elsewhere in Asia.
News of the approval gave a boost to other companies developing Alzheimer’s treatments.
In Europe, Roche has gantenerumab that has a similar action to the Biogen drug in phase III trials with results due in the second half of 2022, but it has had its share of problems.
Contract drug manufacturers are likely to benefit from strong Alzheimer’s demand especially if Roche is successful and needs extra capacity.
Shares in Biogen were trading at US$995.37 ahead of US opening, close to a six-year high.