Last Summer, the U.S. Food and Drug Administration (FDA) approved the first Alzheimer’s drug in nearly two decades… but its approval came with controversy rather than cheers. 👎 Biogen, the company behind the drug, is now sifting through the rubble of a failed launch effort. What Biogen hoped would make a fortune could cost them billions.
That’s because no insurance companies want to cover Aduhelm, which launched at the steep price of $56,000/patient/yr. The drug, which was granted accelerated approval while Biogen conducted additional efficacy studies, reportedly caused bleeding or swelling in the brains of 41% of patients. That bad press caused the drug’s creator to cut prices in half, but that might not even be enough. Biogen reportedly made just $300,000 in Aduhelm sales from July to September 2021, which was down from $1.6 million in the quarter before.
Medicare officials aim to crush Biogen’s Alzheimer’s pipe dream by restricting coverage of the new drug. That decision means the agency would cover the costs for patients participating in “approved clinical trials“, but Medicare will restrict coverage beyond that. The federal health insurance program cited doubts about the drug’s safety and benefits. If Biogen cannot clear clinical hurdles (or change the government’s mind), then Aduhelm will become the company’s biggest paperweight in recent history. 😬 Right now, Biogen is waiting for Medicare to issue its final decision.
However, Biogen has reportedly asked Goldman Sachs to help form a backup plan… an escape hatch, if you will. According to Stat News, Biogen is working with the investment bank to field potential acquisition targets. Among the reported names were Aurinia, Biohaven, and Amylyx. Aurinia jumped to the #1 trending stream on Stocktwits for a bit this afternoon, maintaining its trending activity into the evening. 🌙 The names also appeared in Betaville in support of the news.
Biogen’s ongoing post-approval study might table people’s reservations about the drug. But considering persistent sentiment surrounding Aduhelm, the so-called “phase 4 study” has a lot of work to do. At this point, with $BIIB down 15.6% in the last year, M&A might be the only ‘quick fix’ to the company’s earnings misses.