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Biogen (BIIB) Gets FDA Nod for Narrow Label of Aduhelm

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Biogen BIIB and its partner Eisai announced that the FDA has approved an update to the label of its newly approved drug for Alzheimer’s disease, Aduhelm (aducanumab) that clarifies the patient population in which the controversial drug was tested.

The updated label will mention that Aduhelm treatment should be initiated in patients with mild cognitive impairment due to Alzheimer’s disease or mild Alzheimer’s dementia. For earlier or later stages of the disease, there is no safety or effectiveness data available to support initiating treatment with Aduhelm.

The FDA approved Aduhelm, on an accelerated basis, in June to reduce the accumulation of amyloid beta plaques, a sticky protein, in the brain, which is believed to lead to progression of Alzheimer’s disease.

Aduhelm has become the first medicine to be approved to reduce the clinical decline associated with this devastating disease and targeting the underlying cause of the disease. It should bring in huge revenues for Biogen by meaningfully changing the course of Alzheimer’s treatment.

However, the controversial FDA decision generated several headlines. The FDA approved Aduhelm despite an FDA advisory committee voting against its approval in November last year due to mixed outcomes data from ENGAGE and EMERGE phase III studies.

The FDA approval faced a lot of criticism as some analysts believed the drug was not backed by strong evidence of efficacy. Aduhelm also comes with a hefty price tag of $56,000 a year, which was widely condemned.

However, another group of analysts cheered the drug’s approval despite questionable study results because of the drug’s ability to remove amyloid from the brain and its potential to provide meaningful benefit in preventing progression of this disease.

The purpose of the latest label update is to clarify the patient population that was studied across the ENGAGE and EMERGE phase III studies and the phase Ib PRIME study, based on which Aduhelm was approved.

The new label will narrow the patient population for whom Aduhelm can now be prescribed. However, it accurately reflects the right patients who should be prescribed the drug, which should help doctors and payers clearly decide who is eligible for Aduhelm. Though Aduhelm is reportedly now just eligible for 1 million-2 million patients out of 6 million Alzheimer’s patients in the United States, it should still bring in significant sales for Biogen. This clearly explains why shares shot up around 4% on Thursday despite its eligible patient population being narrowed.

Biogen’s shares have risen 50.8% this year so far against the industry’s decrease of 2.2% in the same time frame.

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Alzheimer’s, a fatal condition that causes progressive decline in memory, has always been a highly challenging area, and not much progress has been made despite significant investments (both funds and resources). Several companies have failed to develop safe and effective treatment options to treat this deadly brain disease. Several large pharma companies, including Roche RHHBY, Amgen AMGN, Novartis NVS, Merck, Pfizer, Lilly and AstraZeneca stopped development of their AD candidates in the last few years either due to low possibility of success or safety concerns.

Despite the setbacks, the companies continue to invest heavily in developing AD treatments, given the high commercial potential in this market.

Biogen currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here

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