Biogen Shares Dip at Slow Aduhelm Uptake and Cost-Cutting Rumors

John Tlumacki/The Boston Globe via Getty Images

Biogen shares dipped almost 3% in premarket trading at news reported by STAT that the company was considering job cuts and cost-cutting in the face of slow uptake of its controversial Alzheimer’s drug Aduhelm. As of September 11, slightly over 100 Alzheimer’s patients had received the drug, reported to be dramatically below Biogen’s internal projections and Wall Street expectations.

Earlier this month, Michel Vounatsos, Chief Executive Officer of Biogen, admitted that the company’s rollout of Aduhelm (aducanumab) for Alzheimer’s disease has been “slower than we anticipated.” The company’s stocks took an even bigger hit at the time, dropping 10% on September 9. 

The FDA approved Aduhelm on June 7, 2021, against the recommendation of its own Peripheral and Central Nervous System Drugs Advisory Committee, which voted against recommending it in November 2020. Three members of the panel resigned in protest. 

The agency also used an Accelerated Approval pathway, which entails follow-up studies for continued endorsement, and based it on a surrogate endpoint, clearance of beta-amyloid, instead of relief of symptoms. The advisory committee had asked if the agency planned on using surrogate endpoints and was told the agency did not expect to do so.

The company has priced the drug at about $56,000 per patient per year. Because there are approximately 3 million Alzheimer’s patients in the U.S., most on Medicare, there are concerns that the drug could bankrupt the Medicare program. 

Both the FDA and Biogen have modified the drug for a smaller population, just early-stage disease. However, the potential accumulative payout would still significantly strain the program if the drug gained wider adoption.

A few insurers, such as UnitedHealth Group Inc., reported earlier that they were waiting for more information from Medicare. The Centers for Medicare and Medicaid Services (CMS) is still reviewing their pricing strategy for the drug. 

The Medicare review is expected to have a proposed decision by the end of the year and a final decision three months after. At this time, coverage is decided at the local level by Medicare administrative contracts, which have 12 jurisdictions across the country. 

In addition, there have been slow responses by healthcare institutions to adopting the use of Aduhelm. One approach Biogen is deploying is offering free doses of the drug. According to a Reuters report, the company sent the drug to a Florida neurology clinic free of charge. On the one hand, that’s not unusual. Drug companies often offer free or less expensive drugs by way of patient assistance programs. However, that is unknown for injectable, infused drugs.

Meanwhile, Biogen’s R&D Day underlined the depth of the company’s pipeline, including 33 clinical programs, with 12 in Phase III or filed.

“Biogen is helping to change the Alzheimer’s disease treatment paradigm by providing the first therapy in 20 years, and we continue to lead the way in neuroscience with our diversified pipeline,” said Vounatsos. “Across our portfolio, we have achieved significant scientific progress, and I believe our specialization in terms of people, capabilities, and programs positions us to deliver multiple novel therapies with the potential to address the most complex neurological diseases.”

In addition to Aduhelm, Biogen presented progress on BAN2401 (lecanemab), a new amyloid beta-directed antibody it has in Phase III development for Alzheimer’s with Eisai, and BIIB080 (IONIS-MAPTRx), a tau-directed antisense oligonucleotide (ASO). Lecanemab received Breakthrough Therapy designation from the U.S. Food and Drug Administration (FDA) in June 2021, and clinical studies have demonstrated the potential to slow Alzheimer’s clinical decline. A Phase Ib trial of BIIB080 hit the primary objective of safety and tolerability and showed durable time and dose dependent decrease of tau protein in cerebrospinal fluid.