Alzheimer’s drug has Wall Street excited, but some researchers are still skeptical

We ought not be surprised that the Wall Street Journal went all-in with its gush-y reporting about lecanemab, the Alzheimer’s drug from Biogen that has shown promise in clinical trials where other drugs of the same class have failed. Investors are drooling.

The reversal in investor sentiment is nothing short of massive. After so many drugs targeting amyloids had failed in clinical trials in recent years, there was growing skepticism of the “amyloid hypothesis,” the idea that targeting an unusual buildup of the protein in patients’ brains should slow dementia.

The results released Tuesday were unequivocal though. The drug reduced cognitive and functional decline by 27%, compared with a placebo. The data, which haven’t yet been published in a peer-reviewed medical journal, hit all of the trial’s primary and secondary endpoints, with many analysts calling it a best-case scenario. Importantly, while the drug did show safety concerns such as brain swelling, it looked safer than other candidates now making their way through clinical trials, wrote Michael Yee of Jefferies.

The positive data make it likely that the Food and Drug Administration will grant Biogen accelerated approval in January, with full approval coming later next year. The bigger question for investors, patients and society is what the Centers for Medicare and Medicaid Services will do. Biogen’s last approved drug for the disease, Aduhelm, received the FDA nod, but CMS effectively killed its commercial prospects by restricting it due to lack of meaningful improvement in health outcomes.

Biogen’s Aduhelm is the first approved treatment for early stage Alzheimer’s patients that may be able to slow the disease. WSJ explains how the drug interacts with brain cells, and why some doctors aren’t ready to prescribe it yet.

This time will be different, with CMS unlikely to “dig in and refuse coverage” due to the highly successful clinical data, wrote Brian Skorney at Baird. With about 2 million Americans suffering from early-stage Alzheimer’s, the costs to the insurance program could be meaningful, leading to higher healthcare costs for most seniors. Just Tuesday, CMS had announced that premiums and deductibles would be declining next year due to lower-than-projected spending on Aduhelm specifically. Now, the government might find itself paying for another pricey Alzheimer’s drug instead.

Just how pricey will be another important question. Biogen has probably learned some hard lessons from the backlash it got to the Aduhelm launch at $56,000 a year, so expect it to price lecanemab at closer to $20,000.

Still, the costs—and the payoff for investors—are likely to be astronomical.

That last part really jumped out at me. They could cut the annual price by almost 2/3 and still make ungodly profits. That shows you how much money big Pharma makes when nobody is keeping tabs on the price they are charging.

And, as Caitlin Owens article in Axios notes:

Some in the research community continue to question the focus on anti-amyloid cures and say success fighting Alzheimer’s will come in combination therapies like those used for heart disease, cancer and hypertension.

“Amyloid-clearing drugs will provide an incremental benefit at best and there is still a pressing need for the next generation of drugs focused on other targets based on our knowledge of the biology of aging,” said Howard Fillit, co-founder and chief science officer of the Alzheimer’s Drug Discovery Foundation.

This is a nightmare scenario for Medicare: an expensive drug of limited benefit that will mean higher premiums for millions of Americans.