Biogen retrenches following Alzheimer’s drug setbacks

Biogen will replace its CEO and significantly cut its sales staff in response to disappointments for its Alzheimer’s disease treatment aducanumab.

The US Food and Drug Administration approved aducanumab, sold under the brand name Aduhelm, in a controversial decision last June. It was the first new therapy for Alzheimer’s disease in nearly 2 decades, and some analysts predicted it would be a multi-billion-dollar seller. But it was shadowed by inconclusive clinical trials and a vote against approval by the FDA’s expert panel.

Initial sales were lackluster. In December, the firm cut the annual cost of the drug in half to $28,200. The final blow came last month when the US Centers for Medicare & Medicaid Services said it would cover Aduhelm only for people participating in clinical trials. Biogen said this policy effectively denied coverage to Medicare recipients.

In an earnings announcement on May 3, Biogen said the US government determination prompted its decision to mostly eliminate the sales force it had built up to market Aduhelm. The layoffs and other cost reductions will save about $500 million annually, the firm said.

Biogen also announced that CEO Michel Vounatsos would step down when a successor is found. “This is the right time to transition to a new leader who will build Biogen’s next chapter on the strong foundation existing today,” Biogen chairman Stelios Papadopoulos said.

In the earnings release, Biogen disclosed that first-quarter sales fell 6% to $2.5 billion, in part due to declining sales of its core multiple sclerosis drugs.

Analysts at the investment firm SVB Securities say Biogen has difficult decisions ahead about the direction to take R&D. In a report, they suggest the firm add a new area of focus, given the risk of developing neuroscience drugs like Aduhelm.

In a presentation to analysts, Biogen executives highlighted what they consider a diverse R&D portfolio. But their top near-term priority is another Alzheimer’s disease treatment, lecanemab, being developed with the Japanese firm Eisai. They expect to file for FDA approval by the first quarter of 2023.