Advancing Biogen’s Alzheimer’s Treatment Could Cost $2.5 Billion Before Knowing if the Drug Works

Advancing Biogen’s Alzheimer’s Treatment Could Cost $2.5 Billion Before Knowing if the Drug Works
April 28, 2015
By Alex Keown, Breaking News Staff

CAMBRIDGE, Mass. – Fully developing an experimental drug to treat Alzheimer’s disease could cost Biogen Idec, Inc. $2.5 billion, Bidness ETC reported this morning.

Biogen Idec’s Alzheimer’s drug that targets amyloid plaque showed promise in early trials. According to news reports, the Biogen drug, BIIB037, or aducanumab, led to reductions in brain amyloid. The plaque reduction was more pronounced as the dose of the drug increased and over time, Reuters reported. Biogen also announced that the drug was able to reduce cognitive decline. Biogen is beginning two Phase III trials, which if they prove successful, could then lead the company to seek approval to market the drug.

Alzheimer's disease, a type of dementia, affects 15 million people worldwide, a number that is expected to grow to 75 million by 2030 due, in part, to the lack of effective treatments. In total there are about 50 million people suffering from some form of dementia worldwide. There are currently no drugs that target the cause of Alzheimer’s the most common form of dementia. There is a widespread belief that the buildup of amyloid plaque in the brain is one of the primary causes of the disease.

George Scangos, Biogen’s chief executive officer, said the early results of BIIB037 are promising and generating excitement, but the pharmaceutical company still has to show that it is an effective early treatment for Alzheimer’s. According to the Bidness report, the estimated $2.5 billion investment sum would include costs of conducting clinical trials as well as construction of a manufacturing facility for the investigational drug. Building a manufacturing facility can take up to four years to complete, so it would have to be a project undertaken prior to knowing additional trial results, which adds to the investment risk – especially in light of weak first quarter reports the company released.

Analysts at Alliance Bernstein said Biogen’s first quarterly reports were weaker than expected, primarily due to poor performance from Tecfidera, the company’s multiple sclerosis drug. But the recent news about the possible breakthrough with the Alzheimer’s medication was cause for excitement. However, the analysts issued a caveat about the cost of fully researching the Alzheimer’s drug.

“Looking ahead there is ample excitement about their Alzheimer's program but we wonder how much it will cost and how long it will take,” the analysts said in their report.

Like Bernstein, analysts at Citi, called the BIIB037 study promising. They said upcoming Phase III trials “bode well” given the successes in early trials.

There are several drugs on the market that help manage Alzheimer’s, but none treat the primary cause. According to a Bloomberg report, there have been more than 100 failed efforts to develop a treatment for Alzheimer’s disease since 1998. Roche reported two failed drugs that targeted the amyloid plaque. Genentech , a division of Roche, is currently running an Alzheimer’s study in Colombia, spurred on in part by Biogen’s early successes with BIIB037.

Pharmaceutical giants Eli Lilly and Company and Pfizer Inc. have also reported setbacks with their experimental Alzheimer’s treatments. Eli Lilly does have another experimental drug in Phase III trials with results expected sometime in 2016. Lilly’s solanezumab targets the amyloid plaque.

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