Biogen Inc. shares failed to rally despite a milestone drug approval by the U.S. Food and Drug Administration (FDA) for Alzheimer’s treatment Leqembi. While many anticipated the FDA’s full approval of Leqembi, some analysts are concerned about potential hurdles during the drug’s rollout.
One major bottleneck is the limited capacity of infusion centers where Leqembi is administered intravenously every two weeks. Typically, these infusions take place at hospitals or infusion-therapy centers. According to Raymond James analysts, this will result in a slow rollout of the drug.
Additionally, Biogen does not expect Leqembi to become profitable until late next year or 2025. Raymond James analysts emphasize the importance of developing a subcutaneous version of Leqembi, currently being worked on by Eisai Co. Ltd., in order to unlock the Alzheimer’s market. This is crucial considering the biweekly intravenous infusion requirements and the existing constraints on infusion capacity.
The logistics involved in the rollout may also affect the uptake of Leqembi, according to Wedbush analysts, who maintain a neutral rating on Biogen shares.
Overall, while the FDA approval of Leqembi is significant, Biogen still faces challenges that need to be addressed for successful market penetration in the Alzheimer’s treatment sector.
Looking Ahead: Leqembi’s Potential for Multibillion-Dollar Revenues
In the coming years, industry analysts project significant revenue potential for Leqembi. Amidst an estimated 1.5 million early Alzheimer’s patients in the United States, each year at a price of approximately $26,500, a 13% market penetration alone could generate a remarkable $5.2 billion in U.S. sales (Cowen analysts, Thursday). Meanwhile, William Blair analysts anticipate that Leqembi could achieve global sales surpassing $8 billion by 2030, providing a subcutaneous option is approved to alleviate the current infusion center bottleneck (William Blair analysts, Friday).
##FDA Scrutiny Post-Approval: Labeling and Risks
Following the full approval of Leqembi, analysts have directed scrutiny towards the FDA’s decisions regarding the drug’s labeling. Notably, the label will include a boxed warning highlighting the risks associated with amyloid-related imaging abnormalities. While such abnormalities may manifest as temporary brain swelling, FDA acknowledges that they can, in rare cases, pose severe and life-threatening consequences (FDA statement). Consequently, analysts at Stifel have deemed the full approval of Leqembi as somewhat of a mixed bag (Stifel analysts, Thursday). Despite this evaluation, they maintain a positive buy rating on Biogen shares (Stifel analysts).
FDA Recommends Genetic Testing before Starting Leqembi Treatment
Revised Label Incorporates Stricter Warnings
Although the revised label includes more rigorous warnings, it does not impose restrictions on the use of Leqembi among major patient groups. TD Cowen analysts note that they do not expect these changes to impact the potential of Leqembi.
Broader Medicare Coverage Now Available
Following the FDA’s approval decision, the Centers for Medicare and Medicaid Services announced that broader Medicare coverage for Leqembi is now accessible. However, Medicare beneficiaries must adhere to certain conditions, such as having their doctor and clinical team participate in a registry to collect real-world evidence on the drug’s efficacy. Analysts assure that these requirements should not burden prescribers excessively. Notably, the registry appears user-friendly and documents the data providers typically gather when assessing patient eligibility for Leqembi, as stated by the William Blair analysts.
Path to Full Approval of Leqembi Has Implications for Eli Lilly’s Alzheimer’s Treatment
Analysts speculate that the path to full approval for Leqembi could have implications for Eli Lilly’s investigational Alzheimer’s treatment, donanemab.
During the FDA advisory committee meeting in June, extensive debate on the risks and benefits of Leqembi took place. As a result, experts believe that donanemab’s safety data will face increased scrutiny. More details regarding a donanemab clinical trial are expected to be revealed at the upcoming Alzheimer’s Association International Conference.
The Oppenheimer analysts’ report on Friday stated that they maintain an outperform rating on Biogen shares, with a price target of $360.
On Friday morning, Biogen shares experienced a slight decline of over 1%. U.S.-listed shares of Eisai also decreased by nearly 3%, while Eli Lilly shares slid 1.4%.
