Biogen’s Alzheimer’s Drug Aduhelm Has Another Shot at Success

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Biogen
’s
Alzheimer’s disease therapy, Aduhelm, has been a disappointment for the company since its Food and Drug Administration approval last spring, with early sales falling far short of Wall Street expectations and a number of medical systems declining to offer it to patients.

Investor dismay has driven shares of Biogen down 30.7% over the past six months.

This coming week, Biogen will have a shot at redemption. By Wednesday, the Centers for Medicare and Medicaid Services, which manages the Medicare program, is scheduled to issue proposed guidelines that would determine whether and how Medicare will cover Aduhelm.

The process comes amid skepticism from doctors over the drug’s efficacy. Medicare coverage is essential to the commercial future of Aduhelm, given that the majority of Alzheimer’s patients in the U.S. are on Medicare.

The proposed guidelines won’t be completed until April, but what comes next week will give investors a clue as to how CMS is leaning. Possibilities range from full coverage to no coverage, with some options in between.

Even proposed guidelines that are positive for Biogen won’t erase investor worries. “The market may need time to see sales ramp,” Jefferies analyst Michael Yee recently wrote. A generally positive outcome next week could lift Biogen shares by 5% to 15%, he said, while a generally negative outcome could push shares down by 10% to 20%.

The proposed guidelines would apply not only to Aduhelm, but also to similar drugs that could be approved in the future, such as

Eli Lilly
’s
donanemab.

Next Week

Monday 1/10

Cannabis producer

Tilray

reports second-quarter fiscal-2022 results

Tuesday 1/11

Albertsons

holds a conference call to discuss earnings.

The Senate Banking Committee conducts a hearing to weigh the renomination of Jerome Powell as chairman of the Federal Reserve for another four-year term. Lael Brainard’s nomination as vice chair will be taken up by the same committee on Thursday, Jan. 13.

The National Federation of Independent Business releases its Small Business Optimism Index for December. Consensus estimate is for a 99.5 reading, about one point more than November’s figure.

Wednesday 1/12

The Bureau of Labor Statistics reports the consumer price index for December. Economists forecast a 7.1% year-over-year spike, after a 6.8% rise in December, the fastest clip since 1982. The core CPI, which excludes volatile food and energy prices, is expected to jump 5.4%, half a percentage point more than in November, which was the most since 1991. Inflation has become a chief concern on both Main Street and Wall Street as the Federal Reserve has acknowledged that it isn’t transitory.

The Federal Reserve releases the beige book for the first of eight times this year. The report gathers anecdotal information and summarizes current economic conditions from the 12 Federal Reserve districts.

Thursday 1/13

Delta Air Lines

and

Taiwan Semiconductor Manufacturing

hold conference calls to discuss quarterly results.

The BLS reports the producer price index for December. Consensus estimate is for a 0.4% monthly gain, while the core PPI is seen increasing 0.5%. This compares with rises of 0.8% and 0.7%, respectively, in November.

The Department of Labor reports initial jobless claims for the week ending on Jan. 8. In the first week of December, jobless claims were below 190,000, a level not seen in more than half a century.

Friday 1/14

Fourth-quarter earnings season begins in earnest with three of the largest U.S. banks reporting earnings.

JPMorgan Chase
,

Wells Fargo
,
and

Citigroup

all release their results before the opening bell.

BlackRock

and

First Republic Bank

release earnings.

The University of Michigan releases its Consumer Sentiment index for January. Expectations are for a 70.4 reading, roughly even with the December data. The index is about 20% lower than its postpandemic peak in April, in part due to consumers’ concerns about rising prices and cost of housing.

The Census Bureau reports retail sales data for December. Economists forecast a 0.3% month-over-month bump for consumer spending. Excluding autos, spending is also seen ticking up 0.3%. This would match the November data for both releases.

Write to Josh Nathan-Kazis at [email protected]