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Biogen (BIIB) to Cut Alzheimer's Drug Aduhelm Price by 50%

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Biogen (BIIB - Free Report) is lowering the price of its controversial new Alzheimer’s drug (“AD”) Aduhelm by half to improve patient access as early sales of the drug have fallen much short of expectations.

Biogen said it is lowering the wholesale acquisition cost (WAC) of Aduhelm by approximately 50% effective Jan 1, 2022. Despite being the first medicine to be approved for reducing the clinical decline in AD indication, the launch of Aduhelm, approved (on an accelerated basis) in June, has been slow due to limited patient access amid lack of clarity on Aduhelm reimbursement.

The launch of the drug has been slower than expected as patient access is limited, pending the CMS reimbursement decision. The final National Coverage Decision (NCD) from the CMS for the class of anti-amyloid antibodies like Aduhelm is expected in April.

Aduhelm was launched with a huge price tag of $56,000 a year, which was widely condemned and was considered a significant cost burden on Medicare. Biogen is now lowering the annual cost at the maintenance dose (10 mg/kg) to $28,200 for a patient of average weight of 74 kg. Biogen expects the lowered price to improve patient access and expects approximately 50,000 patients may start treatment with Aduhelm in 2022.

Biogen also announced plans to implement some cost-reduction measures in 2022 to make up for generic erosion of its key multiple sclerosis drug, Tecfidera and slower-than-expected launch of Aduhelm. The efforts are expected to yield approximately $500 million in annualized savings, most of which will be realized in 2022.

So far this year, Biogen’s shares have declined 3.3% compared with the industry’s decrease of 18.4% in the same time frame.

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We remind investors that Aduhelm’s FDA approval faced criticism about its mixed efficacy results, the FDA selection of the accelerated approval path, and the regulatory process in general. 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. All these issues seem to have affected demand, patient access and reimbursement for Aduhelm, which has resulted in its slow launch. In the third quarter, Biogen recorded just $0.3 million in revenues from Aduhelm.

Meanwhile, the approval of the drug in Europe is also uncertain now as last week, the Committee for Medicinal Products for Human Use (“CHMP”) of the European Medicines Agency (“EMA”) gave a negative opinion regarding Biogen’s marketing authorization application (MAA) for aducanumab.

A group of analysts believe that Biogen’s decision to cut the price of Aduhelm in half increases the chances of a reasonable Medicare reimbursement for the drug in April. Some other analysts, however, believe that the demand for the drug may not improve even if the price is lowered.

It is also being argued that the price cut may be in response to potential competitive pressure in the AD market. Big companies like Roche (RHHBY - Free Report) and Eli Lilly (LLY - Free Report) have developed their own AD candidates, which are expected to be launched in a couple of years.

Roche’s pipeline candidate for AD, gantenerumab, is an anti-amyloid beta antibody developed for subcutaneous administration.

In October 2021, Roche announced that gantenerumab was granted Breakthrough Therapy Designation by the FDA based on data that showed that the candidate significantly reduced brain amyloid plaque in the ongoing SCarlet RoAD and Marguerite RoAD open-label extension studies as well as other studies.

Lilly has developed donanemab, also an anti-amyloid beta antibody for AD.

Lilly has already initiated a rolling submission with the FDA seeking approval for donanemab for early Alzheimer's disease under the accelerated approval pathway based on data from TRAILBLAZER-ALZ. Data from the study showed that treatment with donanemab induced rapid amyloid plaque reduction at 24 weeks in participants with early symptomatic AD.

Lilly expects the rolling submission to be completed by end of first-quarter 2022.

A smaller company, Cassava Sciences’ (SAVA - Free Report) simufilam is also in late-stage development for the treatment of AD. Last month, Cassava Sciences initiated a second phase III study of simufilam for the treatment of patients with AD.

Cassava Sciences’ phase III studies on simufilam are being conducted under Special Protocol Assessments (SPA) from the FDA. 

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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