Biogen CEO to step down as company pulls back on Alzheimer’s drug

Future of Aduhelm was in doubt after Medicare restricted coverage to clinical trials

Biogen said on Tuesday chief executive Michel Vounatsos will step down and that the company is pulling back on selling its controversial Alzheimer's drug Aduhelm, in what appears to be a final blow to its prospect of becoming a big seller.

The future of Aduhelm has been in doubt since the US government's Medicare programme restricted coverage of the medicine to patients in clinical trials.

Aduhelm was expected to be the company’s next big blockbuster treatment but controversy over its approval – without clear evidence of patient benefit – and the US decision to severely limit access cast serious doubt on its sales potential.

Biogen said on Tuesday it was looking at “substantially” eliminating commercial infrastructure related to Aduhelm and plans for more cost cuts in addition to the current program to save $500 million (€475.5 million) annually.

Biogen last month decided to withdraw its marketing application for Aduhelm in Europe after failing to convince the European regulator of the treatment's benefits.

The company said it will retain minimal resources to make Aduhelm available to patients currently taking the drug in the United States.

Mr Vounatsos, who was named as CEO in 2016, will continue in his role until a successor is appointed, the company said. Under his leadership, the US biotech developed and launched several important growth drivers including spinal muscular atrophy drug, Spinraza, and multiple sclerosis drug Vumerity.

Setbacks

"The news [about Mr Vounatsos] is not surprising, given the many setbacks the company has faced," said RBC Capital Markets analyst Brian Abrahams, adding that it "may help add to the perception that Biogen will turn the page from being overly-levered to Alzheimer's to assembling a more diverse pipeline."

Biogen shares were up about 1.3 per cent at $210.03 on Tuesday. The stock is down 47 per cent since Aduhelm was approved in June.

The company was betting on Aduhelm, the first new treatment for the memory-robbing disease in nearly 20 years, to act as a buffer as its established revenue drivers face rising competition.

The US Food and Drug Administration approved the treatment last June despite a lack of clear evidence it slowed cognitive decline and over objections of the agency’s panel of outside expert advisers.

Aduhelm had sales of just $2.8 million in the first quarter, missing analysts’ diminished estimates. The company said its earnings were hit by a $275 million Aduhelm inventory write-off.

Excluding items, Biogen earned $4.38 per share, in line with analysts’ estimates.

Committed

Mr Vounatsos called the setbacks faced by the company in the last 12 months “significant”, but said Biogen remained committed to Alzheimer’s disease.

Biogen is still counting on a second Alzheimer's drug, Lecanemab which, like Aduhelm, was developed with Japanese company Eisai.

Biogen plans to complete a rolling submission of data for Lecanemab under the US accelerated approval pathway in the current quarter before submitting it for full approval in 2023.

On Tuesday, Eisai revised down its operating profit forecast for the year to March 31st by 31.4 per cent to 53.5 billion yen (€391 million), citing the impact of the US coverage policy for Aduhelm. – Reuters