One could write a book (or two) about everything that's happened to Biogen (BIIB 0.07%) in the past three years. The company's controversial approval of Alzheimer's disease (AD) medicine Aduhelm makes for a fascinating story, as does the fallout from this approval and the fact that Aduhelm is nowhere close to living up to its lofty potential on the market.
With the issues surrounding Aduhelm and Biogen's loss of exclusivity for multiple sclerosis medicine Tecfidera -- which was one of its top-selling products -- the biotech isn't doing too well. What would it take for Biogen to turn things around?
Aduhelm's post-marketing study
One of the reasons Aduhelm's approval was so controversial was that some experts were not convinced the data showed that the medicine was effective in clinical trials. That's why the U.S. Food and Drug Administration (FDA) made sure Biogen would conduct a post-marketing study for the AD therapy. The trial would hopefully help assuage the fears of investors, physicians, and, most importantly, patients.
Biogen planned to start screening potential participants in May. The study may take some time to complete, and no one knows what its outcome will be yet. But if Aduhelm delivers solid results in this post-marketing trial, that will surely improve Biogen's prospects. If, on the other hand, Aduhelm flops, regulators could take the medicine off the market.
In fairness, some of the pessimism concerning Aduhelm already seems baked into Biogen's stock price. But a lot could change before it completes this all-important study.
Another AD medicine?
Biogen's work in AD is not limited to Aduhelm. The company is developing another potential AD treatment called lecanemab. Biogen is working with its partner, Japan-based Eisai, on this program. Eisai is also Biogen's collaborator on the Aduhelm project. In May, the two entities completed a rolling submission to the FDA for lecanemab as a potential therapy for mild cognitive impairment due to AD.
Lecanemab and Aduhelm work similarly, by targeting the buildup of the beta-amyloid protein in the brain that is thought to be linked to the cognitive impairment that comes with AD. Lecanemab is currently undergoing a phase 3 study, the results of which Eisai and Biogen will share in the coming fall. Regulators have agreed that this late-stage trial can serve as a confirmatory study for the potential medicine.
If the results are positive, that will lead to lecanemab's eventual approval. If lecanemab can avoid the drama that Aduhelm encountered while demonstrating robust safety and efficacy, it could become highly successful, considering the 5.8 million (and growing) patients with AD in the U.S. alone.
Stay tuned
Several competing AD therapies could hit the market within the next two years. For instance, Eli Lilly is working on its own product within this therapeutic area, donanemab, for which it initiated a rolling submission to the FDA in October 2021. There are other drugmakers in this race too. However, Aduhelm is already approved.
True, it hasn't performed particularly well on the market, and the U.S. Center for Medicare and Medicaid Services made a coverage decision that will negatively impact the therapy. Still, Biogen could earn yet another approval in this area. On the other hand, if lecanemab fails to prove effective, that will be a blow to Biogen's prospects. The company does have a little more than half a dozen other pipeline candidates in late-stage studies.
Even so, Biogen's financial results will likely continue to be unimpressive in the near term largely due to the issues with Aduhelm and Tecfidera. As things stand, the company's longer-term prospects still look a bit too dependent on its AD portfolio. Its most crucial launch within the next couple of years could be in this area, in addition to Aduhelm.
So where does that leave investors? It'll be interesting to monitor what happens to Biogen until the end of the year. The company's shares may be worth considering if lecanemab delivers solid results in its ongoing confirmatory study. Until then, it's probably best to watch from the sidelines, especially as there are much more attractive biotech stocks on the market.
