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It may not be fair, but the fate of Biogen’s stock is now closely tied to the success – or failure – of its controversial Alzheimer’s treatment, Aduhelm. It is a future that promises to be increasingly cloudy.
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For Aduhelm to really gain traction, it must be approved by the Centers for Medicare and Medicaid Services. This process will take months. Further, Biogen (BIIB) is being beaten over Aduhelm’s $ 56,000 price tag – a cost that some say could shatter the healthcare system.
And others say the drug hasn’t proven to provide clinical benefit for patients. This month, the Ohio-based Cleveland Clinic said it will not administer Aduhelm based on a review of existing safety and efficacy data. New York-based Mount Sinai says it will not infuse Aduhelm pending decisions on best practices and form addition protocols from its own experts. The latter also referred to an investigation by the Office of Inspector General into Aduhelm’s approval.
Still, doctors say patients are lining up for a chance to receive the first drug that promises to change an underlying pathology in Alzheimer’s disease: plaque built up in the brain. Other drugs approved over the past two decades treat symptoms of the disease.
“Inquiries are definitely coming in,” Dr Dennis Selkoe told Investor’s Business Daily. Selkoe is Professor of Neurological Diseases in the Neuroscience Program at Harvard University. His laboratory studies Alzheimer’s and Parkinson’s diseases.
“We knew they would. And that’s great news,” Selkoe said.
Biogen Stock and Aduhelm
The story of Aduhelm is a biotech soap opera that caused wild swings for Biogen’s stock.
Biogen shares lost a third of their value in May 2019 when the company said the drug – formerly known as aducanumab – would likely fail in clinical trials. Seven months later, shares shot up when the company turned around and said the drug had in fact passed a test.
At the end of 2020, a panel of experts voted against the approval recommendation and Biogen’s stock took another hit. When the Food and Drug Administration granted Aduhelm fast-track approval in June, the shares reversed course again. The approval gives Biogen and its partner, Eisai, nine years to prove that Aduhelm’s mechanism – the removal of beta-amyloid plaques in the brain – actually leads to a cognition advantage.
But then, in July, the FDA asked the Office of the Inspector General for an independent review of the process that led to Aduhelm’s approval – and Biogen’s stock plummeted again. This follows a Stat News report that Billy Dunn, head of the FDA’s Office of Neuroscience, met with Biogen to discuss Aduhelm in 2019. Biogen has said it will cooperate with an investigation. Two House committees are also investigating the matter.
Meanwhile, Aduhelm can still hit the market. But with the CMS decision still due, a high price tag and questionable efficiency, the bigger question still arises: what will be the use of Aduhelm? The future of Biogen’s stock depends on this.
How will health insurance deal with Aduhelm?
Analysts are calling for a steady increase in profits and revenues for Biogen through 2025. The addition of Aduhelm could help offset the decline of Tecfidera, Biogen’s multiple sclerosis treatment. Tecfidera now faces generic competitors.
But several challenges could negate Aduhelm’s ramp, says SVB Leerink analyst Marc Goodman. The first stems from the limited capacity of the health system. The Aduhelm treatment is done by infusion over one hour. Infusion centers face challenges in meeting demand.
The second is the cost test. Patients could foot the bill for a preliminary scan to prove their brains are riddled with beta-amyloid. These analyzes cost around several thousand dollars. They might also end up paying for semi-regular magnetic resonance imaging to watch for a side effect known as amyloid-related imaging abnormalities, or swelling in specific parts of the brain.
Even if patients receive Aduhelm, there is also the question of price. Assuming Medicare chooses to cover Aduhelm, patients remain responsible for 20% of the cost of the drug. This comes down to $ 11,200 for one year of treatment. That’s a big chunk of the median annual income of a Medicare beneficiary, the Kaiser Family Foundation wrote in a recent report.
It is estimated that one million to 2 million Americans could receive Aduhelm under an updated label that restricts its use to mildly affected patients. Most should have Medicare coverage.
The Kaiser Family Foundation estimated that if just half a million people received Aduhelm, it would cost Medicare $ 29 billion in one year. If 1 million people receive the drug, spending for Aduhelm would reach $ 57 billion. This far exceeds Medicare Part B spending for all other drugs.
Biogen roughed up on its price
Critics also say that Aduhelm’s price is just too high. Still, Biogen’s stock hit an all-time high after approval.
Recently, Biogen said in a written statement that it is working with public and private health insurance payers as well as Medicare to ensure coverage policies support patient access. The company did not respond to a request for comment from IBD.
The Institute for Clinical and Economic Review, or ICER, has looked at aducanumab. The nonprofit organization assesses the costs and benefits of drugs. He awarded a prize of $ 2,500 to $ 8,300 per year for Aduhelm. Even the most optimistic view would only lead to a list price of $ 11,100 to $ 23,100, the ICER said.
“Our report notes that only a hypothetical drug that stops dementia completely would deserve this price point,” the ICER said after the June 7 approval. “The evidence for aducanumab suggests that the drug is not as effective at best.”
Harvard’s Selkoe agrees.
“I think it’s too high,” he said. “And I think Biogen has heard that from everyone.”
Stock Biogen: Facing the competition
But what could ultimately bring the price down is competition. Investors in Biogen shares are certainly keeping an eye on this aspect. Selkoe Notes Eli lilly (LLY) plans to file an application soon for approval of another Alzheimer’s disease treatment targeting amyloid, called donanemab. rock (RHHBY) is also working on a similar drug called gantenerumab.
Despite the ongoing controversy, Selkoe says the FDA made the right decision.
“The FDA could have refused and requested another trial, which would have meant that my patients would not have had access to this agent for another four years or even more,” he said. “Or, they could approve it.”
The biogen stock approached 500 following approval.
Selkoe worked with the lab that first advanced the theory of amyloid. He says genetic evidence supports amyloid as a target in the treatment of Alzheimer’s disease. But there are also other potential targets, he said. Biogen’s Aduhelm is a small first step.
“You have to walk before you run,” he said. “The idea that amyloid is unrelated to cognitive failure – which is the very reason the FDA cites for endorsing Aduhelm – that notion makes no scientific sense.”
The first “rigorous” test came with Aduhelm
Dr. Howard Fillit, Scientific Director of the Alzheimer’s Drug Discovery Foundation, says Biogen was the first to study amyloid elimination and cognitive benefits “in a rigorous way.” Other studies of drugs targeting amyloid did not require a positive brain scan to enroll.
“There is growing evidence that if you remove amyloid from the brains of patients with Alzheimer’s disease, there is modest clinical benefit, but that is not yet clear,” he said. he said in an interview. “There is an ambiguity in the data from Biogen and the data from Lilly is really only Phase 2 data.”
He added: “It’s still controversial. We need another study.”
Follow Allison Gatlin on Twitter at @IBD_AGatlin.
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