Biogen's troubled Aduhelm hit with CMS slapdown—now what?

The Centers for Medicare & Medicaid Services (CMS) has maintained its restrictive stance on Aduhelm, limiting the Alzheimer’s disease drug’s coverage to randomized clinical trials. Now, it’s time for the drug’s developer, Biogen, to do some serious rethinking—including, as one analyst suggests, ceasing commercialization.

Thursday evening, Biogen hit back at Medicare’s final decision, arguing that the rule “effectively denies all Medicare beneficiaries access to Aduhelm.” Industry group PhRMA said the policy may “effectively prevent doctors and patients from deciding whether a particular FDA-approved medicine is the right option for them.” Critics of Aduhelm’s approval such as Public Citizen, meanwhile, applauded the decision as a win for “evidence-based medicine.”

After CMS released its draft guidance in January, industry watchers have largely been expecting this outcome; some were holding on for a slight improvement. But now, “one last glimmer of hope for Aduhelm [is] snuffed out,” Piper Sandler analyst Christopher Raymond said in a note Thursday.

As a result, Aduhelm won’t have any meaningful uptake in the near- and medium-term, Raymond and RBC Capital Markets analyst Brian Abrahams said in separate notes.

In a small adjustment from January's draft guidance, the CMS changed the coverage requirement from “CMS-approved” clinical trials to now allow reimbursement for anti-beta-amyloid antibodies approved under the FDA accelerated approval pathway if a patient is enrolled in an FDA-approved randomized clinical trial or a National Institutes of Health trial. Aduhelm is currently the only drug that fits that description.

Still, that move doesn’t change the number of patients who could be covered. Biogen’s phase 4 ENVISION trial, which expects to enroll 1,500 patients with mild Alzheimer’s, would qualify. The company filed the final protocol to the FDA last week and plans to enroll the first patient in May for what is expected to be a four-year study.

Without meaningful access for more patients, the negative Medicare policy “likely spells the end for Aduhelm,” Abrahams said. The RBC analyst figures Biogen might consider scrapping commercialization activities and potentially the phase 4 trial to save costs.

Biogen has already revealed a cost-cutting scheme in December targeting $500 million in annual savings. And, when the CMS draft guidance came out in January, Biogen CEO Michel Vounatsos warned that he will execute “additional waves” of reshuffling to protect the company’s bottom line if the final policy stays unchanged.

In 2021, Aduhelm brought in about $3 million in sales compared with $485 million in selling, general and administrative costs. After Biogen reported those numbers, Mizuho analyst Salim Syed questioned when the company’s “fiduciary duty kicks in to shut down the program.”

While Aduhelm looks like a goner, Biogen still has another shot at the big Alzheimer’s market. A second anti-beta-amyloid antibody that Biogen is collaborating with Eisai on, lecanemab, is expected to report phase 3 results in the second half of 2022.

When asked about whether Biogen would ditch Aduhelm in favor of lecanemab during a conference call in January, Vounatsos said he would wait for that phase 3 readout to assess the two drugs’ market prospects. When that day comes, “we will be unemotional about the opportunity to prioritize one versus the other,” he said.

“If shorter term the patients have better chance to have access with [lecanemab] and that the data supports so […] we will certainly be agile with Eisai,” Vounatsos said at the time.

Learning from Aduhelm, Biogen and Eisai have filed lecanemab with the FDA seeking for an accelerated approval based on biomarker data that the drug could reduce protein plaques in the brain. But the phase 3 trial, dubbed Clarity AD, is designed to evaluate whether lecanemab can improve progression of cognitive decline and therefore qualify for a full approval.

In what Jefferies analyst Michael Yee viewed as an important positive development, CMS is opening broader coverage for anti-beta-amyloid drugs with full FDA approval based on cognitive benefits. CMS would provide coverage in CMS-approved studies, such as a data collection through routine clinical practice or registries. Plus, such a drug could also be covered in additional administration settings, including outpatient department or an infusion center.

“Biogen is carefully considering its options and will provide updates as the company further evaluates the business impact of this decision,” the company said in a statement Thursday.