Biogen $BIIB is once again signaling its confidence in the late-stage success of its high-risk Alzheimer’s drug aducanumab this morning, handing out $50 million to its partners at Neurimmune in exchange for a 5% cut in the royalty rates it will be due in the event the drug hits the market.
If they’re right, Biogen’s deal was a steal. And if they’re wrong, no one is likely to grouse about an extra $50 million loss against the backdrop of an epic fail taking down the one late-stage Alzheimer’s drug that can still muster enthusiasm.
This isn’t the first time that Biogen has shelled out cash to cut the royalty stream. It paid $150 million for a 15% cut last fall, leaving the new rate after today at somewhere in the high single digits or low teens.
Biogen has also been restructuring its split on the drug with Eisai, handing over the lion’s share of the Japanese market in exchange for 5% more of the US and 18.5% of the European markets. Not everyone was happy to see Biogen reduce its share of the Japanese market to 20%, but it will all be moot without positive data.
Once again, Biogen CEO Michel Vounatsos is leaving analysts hanging as they wait to see the big biotech pull off a major deal with its reserves of cash. The recent $1 billion alliance with Ionis was a discovery pact. And analysts want to see some late-stage hits that can provide a few big catalysts for the company.
Biogen licensed aducanumab from Neurimmune in 2007. And Neurimmune CEO Roger Nitsch says he’ll put this new stash to use on their antibody R&D work.
Biogen sparked considerable enthusiasm for the drug with a little hard evidence that it could have an impact on cognition. But it still faces an enormous hurdle in Phase III, which would daunt anyone after a seemingly unending stream of pivotal trials have failed to produce anything that can bend the curve of the disease pathology. The researchers on this project also have to prove that the drug is relatively safe to take.
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