A Wall Street analyst described the launch of Biogen’s new Alzheimer’s disease drug as “potentially the worst drug launch of all time.”
The critical note from Raymond James analyst Steven Seedhouse came in response to the news that Aduhelm, the company’s new treatment for the neurodegenerative disease, generated only $300,000 in sales in the third quarter of the year. It was approved by U.S. regulators back in June.
“We are obviously disappointed with the delayed uptake,” Biogen CEO Michel Vounatsos told investors on Wednesday, according to a FactSet transcript of the company’s earnings call.
Shares of Biogen Inc. (NAS:BIIB) gained 0.1% in trading on Thursday morning. However, the stock closed Wednesday at $266.57, its lowest point since April 29.
Aduhelm’s story is complicated . When the then-experimental therapy was going through late-stage clinical trials in 2019, the data showed it didn’t work, and Biogen shelved the product. Then, months later, the biotech resurrected it, introduced a new, positive take on the older data, and announced plans to seek approval from the Food and Drug Administration.
Aduhelm, then called aducanumab, eventually received approval—and widely, for all people with the disease—though even that was controversial, and Biogen in July requested a narrower indication. Several members of the FDA’s advisory committee that voted against the agency approving Aduhelm quit in response, and acting FDA commissioner Janet Woodcock in July announced a federal investigation into the approval process for Aduhelm.
But back to this week’s news.
Both company executives and analysts say that much of the drug’s success depends on how willing the Centers for Medicare and Medicaid Services is to pay for Aduhelm, given that most patients with Alzheimer’s are of Medicare age.
The CMS is expected to issue a draft national coverage decision on reimbursing the class of therapies that includes Aduhelm in January. A final decision is expected in April. (A positive NCD would be a major driver of sales, according to SVB Leerink’s Marc Goodman.) Biogen also told investors it’s conducting a raft of new clinical studies for the drug.
Even so, Seedhouse wrote in a note to investors that “we find it impossible to be more constructive with all of these uncertainties, our prevailing negative view of the clinical data, and the obviously brutal launch so far.”
Other analysts were softer in their critiques but still wary about Aduhelm’s reach. RBC Capital Markets’ Brian Abrahams said “the poor launch optics may stoke more negative headlines, and it may take another year for any hints on whether BIIB’s continued considerable investment in the program is prescient or foolhardy.”
Abrahams predicted $417,000 in sales for the quarter. The Street consensus was noticeably higher, at $17 million.
“We stay the course because we do believe in our data,” Vounatsos said. “We do believe in additional data coming up. And we do believe that the system will adjust. And it’s just a matter of time.”
Biogen’s stock is up 8.8% for the year, while the broader S&P 500 (S&P:SPX) has gained 20.3%.