Biogen stock tumbled Thursday after Chief Executive Michel Vounatsos admitted the launch of highly controversial Alzheimer’s drug Aduhelm has been “slower than we anticipated.”
Vounatsos blamed “confusion, misinformation and controversy” surrounding the drug’s data and accelerated approval. That approval hinged on what’s known as a surrogate endpoint. This means Biogen (BIIB) still has to prove Aduhelm’s clinical benefit in additional testing.
On the stock market today, Biogen stock toppled 6.7% to 300.15. This put shares well below the 468.55 high after Aduhelm gained approval on June 7. Biogen stock has fallen since then as major medical centers have said they won’t administer Aduhelm.
Now, Vounatsos says Biogen may need to revisit its already “very low sales target” for the year.
Biogen Stock: Call For $10.76 Billion In Sales
During the second quarter — the quarter in which Aduhelm gained approval — Biogen logged $1.6 million in sales of the Alzheimer’s treatment. At the time, financial guidance assumed “modest” Aduhelm revenue in 2021 with sales expected to ramp in the years after.
Biogen stock analysts currently call for $10.76 billion in full-year sales across all products. Revenue would fall close to 20%. The dive comes as Biogen’s Tecfidera multiple sclerosis treatment faces new generic rivals. Aduhelm was Biogen’s hope to help stave off the sales tumble.
But only about 50 centers around the country have given at least one dose of Aduhelm, Vounatsos said at an investor conference hosted by Morgan Stanley.
The company has staunchly defended its Aduhelm thesis. Aduhelm works by removing the built-up beta amyloid plaque in the brains of Alzheimer’s patients. Experts don’t all agree that removing that plaque leads to a benefit on cognition.
Medicare Decision Looms
Next, Biogen stock investors are looking for the Centers for Medicare and Medicaid Services to determine whether they will cover Aduhelm. That process will take months. Aduhelm’s list price is $56,000 a year. That’s the price before discounts and rebates.
Some have said Aduhelm will break the Medicare bank.
An estimated 1 million to 2 million people in the U.S. would receive Aduhelm. The Kaiser Family Foundation has estimated that if just 1 million people receive the drug, it would cost Medicare $57 billion in a year. That far surpasses the agency’s total spending under Part B for other drugs.
In addition to the Biogen stock dive, shares of Eli Lilly (LLY) stumbled 5.8% to 240. Lilly is working on a next-generation version of Aduhelm. It’s also in midstage testing on a drug called donanemab that also removes the buildup of amyloid in the brain.
Follow Allison Gatlin on Twitter at @IBD_AGatlin.
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