Key points:
- Biogen's revolutionary Alzheimers treatment will see limited commercial effect for now
- The CMS has limited the drug to individuals partaking in clinical trials
- Further data from the ‘Envision' trial is needed to back up the commercial capability of Aduhelm
Biogen (NASDAQ: BIIB) has recently become a figurehead for the modern fight against Alzheimers, boasting its potentially revolutionary treatment – Aduhelm. It has been deemed as a breakthrough in limiting the escalation of Alzheimers, but Biogen is constantly jumping through hoops to pave a way for the treatment in today’s much-needed market. At the end of last month, sentiment was positive following a submittal of the final Phase 4 ‘Envision’ trial; but just last week a decision from the CMS changed everything.
In the simplest of terms, the Centers for Medicare & Medicaid Services (CMS) decision revoked the widespread opportunity for Aduhelm by limiting the drug to individuals participating in clinical trials, severely limiting the number of patients eligible for Aduhelm. Unfortunately for Biogen the development will constrict any noticeable commercial opportunity until positive data from the ‘Envision’ trial.
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It's not particularly surprising that various analyst updates followed the news; Piper Sandler, Wedbush, Moody’s and more all shared the same ‘daunting’ outlook for Biogen and its mission for Aduhelm. Piper Sandler analyst Christopher Raymond kept a Neutral rating and $200 price target, pointing out that the decision “kills any chance” of the drug finding commercial traction, suggesting revenue estimates for the coming years will need to be revised. Similarly, Laura Chico from Wedbush notes the precarious future of the company and struggles to make out any sort of compelling growth strategy.
Finally, Moody’s Investor Service downgraded the company citing a negative outlook. With Aduhlem’s limitations, the rest of Biogen’s core products appear weak; facing declining trends due to ‘competitive pressures’.
Biogen’s hoped for Aduhelm have ultimately been postponed for the foreseeable future. Bearing in mind the company only submitted for a Phase 4 trial at the end of last month, the commercial prospect of Aduhelm is on hold, and thus Biogen appears exposed.