Biogenic (BIIB) shares skidded on Friday after the Food and Drug Administration fully approved the Alzheimer’s treatment, Leqembi.
Leqembi had already expedited approval. But with traditional approval, Medicare officials said the agency would reimburse patients for the cost of Alzheimer’s treatment. Doctors will have to submit patient data before treatment and every six months to a registry database.
Analysts do not expect the registry requirement to slow down Leqembi use. But they were divided on how quickly Biogen and partner Eisai (ESAIY) can increase the substance. During a CNBC segment, Eisai USA CEO Ivan Cheung said “many health systems are quite clear.”
The approval also includes a black box warning for an increased risk of brain swelling in patients with a specific genetic abnormality and those on blood thinners. The FDA suggested that patients receive genetic testing before treatment.
In midday trading on today’s stock market, Biogen shares fell 3.2% near 275.65. Eisai shares fell a fraction near 17.
Biogen stock: Medicare coverage is key
Leqembi has been on the market since the accelerated approval in January. But without Centers for Medicare and Medicaid Services coverage, use has been limited.
On Thursday, CMS said it would reimburse the cost of Leqembi for patients with early Alzheimer’s disease with abnormal amyloid plaques in the brain. The Alzheimer’s Association applauded the Medicare move. Leqembi costs $26,500 annually without insurance.
“For people not enrolled in Medicare, including many eligible people under the age of 65, we expect other payers to ensure no-burden access,” Joanne Pike, executive director of the Alzheimer’s Association, said in a written statement.
But Wedbush analyst Laura Chico says it will take some time before Biogen can really ramp up the drug. She maintained her neutral rating on the Biogen share.
“This marks an important period of transition for Biogen as many of its flagship products face increasing competition and new CEO Chris Viehbacher seeks to change both the cost structure and risk profile of the product portfolio,” she said in a note to clients.
Piper Sandler analyst Christopher Raymond, on the other hand, expects “robust uptake — starting now.” He expects US Leqembi sales of $55 million, $465 million and $995 million in 2023, 2024 and 2025, respectively. Although he notes the black box warning is a bit of a curveball.
“These precautions are nothing new, so our initial impression is that this cautionary language is unlikely to affect prescribing,” he said in a note. “In terms of CMS, right down the line, broader coverage is provided, with registry requirements that we see as not overly burdensome.”
“Early days” in Alzheimer’s treatment
Dr. Howard Fillit, chief scientific officer of the Alzheimer’s Drug Discovery Foundation, says the approval is an important first step. Leqembi is the first treatment to change a characteristic of the disease. But there are other markers linked to Alzheimer’s disease.
“Now more than ever, it is important to redouble and expand our focus on developing the next generation of drugs based on the biology of aging that can lead to a combination therapy and precision medicine approach,” he said in a written statement.
The foundation estimates that more than three-quarters of experimental Alzheimer’s treatments explore new targets — including misfolded proteins, inflammation, metabolic disturbances, vascular problems and other potential pathways.
“While we celebrate the FDA approval of Leqembi, we recognize that the journey toward effective treatments for Alzheimer’s is still in its early days,” Fillit said.
After the approval, Biogen stock fell to its lowest point since April, according to MarketSmith.com.
Follow Allison Gatlin on Twitter at @IBD_AGatlin.
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