Biogen CEO Michel Vounatsos is going all in on his late-stage Alzheimer’s drug aducanumab.
The big biotech said today that it paid Neurimmune, which out-licensed the drug to Biogen, $150 million to cut its negotiated royalty rate for post-approval sales by 15%. And it’s prepared to pay another $50 million for another 5% rate reduction.
The $200 million deal comes on top of yesterday’s announced plan to restructure Biogen’s partnership with Eisai on aducanumab, which one prominent analyst expects will cost Biogen about $300 million in added research costs.
In that revision, Biogen upped its US and European share of the profits by 5% and 18.5% respectively. Eisai, which opted in early on the deal, will now get 80% of the Japanese market, says Leerink’s Geoffrey Porges.
Investors didn’t seem too thrilled by that switchup, though, with Biogen’s shares sinking about 3% on Monday.
Commenting on the Eisai deal, Porges noted:
This agreement is a surprise and has occurred outside the two disclosed opt-in time windows for Eisai…Although the reduction in Biogen’s Japan profit split from 50% to 20% may seem trivial compared to the US and EU rights, blockbuster Alzheimer’s medicines such as Aricept and Namenda have earned 20-25% of their peak global revenue from the Japanese market, while the EU has contributed only ~10%. However, the price dynamics have changed quickly in Japan since these peak sales figures were achieved in 2010 and 2015, and we note multiple instances of drug manufacturers being required to reimburse the Japanese government and slash prices for blockbuster drugs (Harvoni, Avastin, Plavix) that sell over a certain revenue threshold. Biogen appears willing to leave the majority of this market to Japanese-domiciled Eisai, who are likely better equipped to handle these changing dynamics.
Biogen is advancing a drug that has helped reignite the kind of fervor that drove a long lineup of major Phase IIIs, which all crashed against the rocks over the last 15 years. By targeting amyloid beta, the biotech has been able to demonstrate some positive results for high-risk patients in early studies. But this is anything but a sure shot.
ARIA is also a clear threat. The incidence of ARIA-E in ApoE4 carriers in the fixed-dose arms at one stage was 5 percent in the 1 mg/kg and 3 mg/kg arms, 43 percent in the 6 mg/kg arm and 55 percent in the 10 mg/kg arm. The incidence of ARIA-E in ApoE4 carriers in the titration arm was 35 percent.
Now in late-stage testing, Biogen CEO Vounatsos is betting his reputation on success.
“This amended agreement with Neurimmune improves aducanumab’s potential value to Biogen as we pursue our strategic goal of leadership in Alzheimer’s disease,” says Vounatsos.
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