Biogen Inc.’s
BIIB,
stock sank 9.3% in premarket trading on Wednesday, the day after regulators proposed limiting access to the class of Alzheimer’s disease drugs that includes the company’s therapy, Aduhelm.
The Centers for Medicare and Medicare Services on Wednesday issued a draft National Coverage Determination, proposing that patients who take these drugs will need to enroll in CMS-approved clinical trials to get reimbursed for the treatment.
The company criticized the decision, saying that “it is imperative to change this draft decision to be aligned with reimbursement for other therapies for progressive diseases.”
If the decision moves forward, it will likely diminish sales potential for the drug, which has struggled to gain traction since it was first approved by the Food and Drug Administration in June.
“Basically, CMS is acting as the de facto FDA, and BIIB needs to run another Phase 3 trial (but CMS will pay for the drug in the trial rather than BIIB having to eat the cost),” Raymond James analyst Danielle Brill wrote in a note to investors.
“In the near term, we expect the ramp of Aduhelm to remain very slow and disappointing and thus consensus numbers need to come down for 2022 and 2023 at a minimum,” SVB Leerink analysts said.
Eli Lilly & Co. Inc.’s
LLY,
stock was down 3.5% on Wednesday morning before the market opened; its experimental Alzheimer’s drug, donanemab, is also included in this class of drugs.
The final coverage decision is expected in mid-April after a public-comment period.
Biogen’s stock has gained 0.7% this year, while the broader S&P 500
SPX,
is down 1.1%.
Source: https://www.marketwatch.com/story/biogens-stock-tumbles-after-the-u-s-proposes-restricting-access-to-its-alzheimers-disease-drug-11641998657?siteid=yhoof2&yptr=yahoo