Biogen said this week that it’s effectively ending promotional efforts for Aduhelm and shedding CEO Michel Vountasos. While neither move came as a complete surprise, in retrospect they marked a stunning fall – both for the brand which had been the most prized of the company’s future assets and for the executive who fashioned the company’s strategy around it.
During the firm’s first-quarter earnings call, Vounatsos said that Biogen will “substantially” eliminate the commercial infrastructure for Aduhelm. The decision, which will aim to save $500 million annually, is in addition to previously communicated initiatives already targeting about $500 million in annualized savings, bringing the total to roughly $1 billion.
The marketing pullback amounted to an acknowledgement by the biotech that its once-promising drug for the fatal neurodegenerative disease would not become a significant revenue source. Aduhelm had been in a downward spiral since its debut, with several private insurers withholding coverage, even after Biogen halved the drug’s price.
And this year, Medicare’s parent refused to pay for it under routine circumstances. Last month’s coverage decision by the Centers for Medicare and Medicaid Services meant that the drug will be reimbursed only for patients taking it as part of a clinical trial, despite pushback from the patient community.
The decision effectively blocked the brand from its biggest market: seniors covered by Medicare. In the first quarter of 2022, Aduhelm brought in U.S. revenue of just $2.8 million. Since launch, it has generated a mere $5.8 million, a disappointing tally for a drug once projected to become one of the world’s top-selling medicines.
Thus it made little sense to maintain Aduhelm’s sales infrastructure. The company had earlier withdrawn its application to market the infusion drug in Europe.
The company also announced on Tuesday that it has begun a search for a new CEO and that Vounatsos will continue in his role until his successor is found. Vounatsos has served as CEO since 2017.
“It’s good” to have someone else come with the support of the board and to “basically revisit the assumptions,” he told investors, adding that “the business continues, and I will be at the top of it until the last second.”
Moving on from Vounatsos after five-and-a-half years may be interpreted as a commentary by Biogen’s board on the man who was the principle architect of the company’s strategy, one which relied heavily on the controversial Alzheimer’s med. His fate at the helm had been in doubt since at least January.
“We will retain minimal resources to manage patient access programs, including a continued free drug program for patients currently on treatment in the U.S.,” Vounatsos said on the earnings call. The company will also fund some Aduhelm regulatory and R&D activities, including a re-dosing study and the initiation of its Phase 4 post-marketing requirement study.
As Biogen prepares to chart a post-Aduhelm course, here are three takeaways for marketers hoping to learn from the experience:
1. Drama isn’t helpful for marketing drugs. This week’s developments came less than a year after Aduhelm launched. It was saddled from the get-go by a disastrous package for those tasked with its marketing: inconclusive efficacy data, a $56,000 price tag and a fierce debate among physicians, scientists and the patient community.
Early on, Biogen pointed to Medicare coverage as a big hurdle to adoption, but that wasn’t the only one. The company also acknowledged at the time that “a meaningful portion of prescribers” were still on the fence.
The drug was the first new Alzheimer’s treatment in nearly two decades and had inconclusive clinical findings, meaning that many doctors harbored questions. The U.S. Food and Drug Administration approved Aduhelm on the basis that its ability to clear amyloid — the sticky protein that clumps into plaques in the brain — may delay patients’ clinical decline.
Biogen needed to reassure clinicians that that surrogate endpoint was more than a longshot, and do so amidst a near-constant drumbeat of controversy playing out in the media. That included several lawmakers launching probes into the approval, as well as a federal investigation into the FDA’s process for reviewing the drug.
Vounatsos and R&D chief Al Sandrock, who stepped down at the end of last year, decried what they viewed as criticism outside normal bounds. Yet management pushed off publication of the key data that led to the approval for more than two years after they appeared in a press release. (The data were finally published in March of this year in what some characterized as a “little-known journal.”)
Meanwhile, several high-profile medical centers, like the Cleveland Clinic and Mount Sinai, refused to offer the drug. Iin that yawning void, physicians — including the many neurologists who had stood ready to prescribe it, per a poll taken in the second quarter of 2021 — were left to make up their own minds.
2. Patients (still) have a hard time accessing Alzheimer’s drugs. Many patients with Alzheimer’s disease have limited awareness of Medicare’s decision. But Biogen’s decision to pull back on Aduhelm, at a time when few other therapy options are on the horizon, means they will continue to have trouble accessing treatment.
Other approved drug options include Aracept and Namenda. Neither therapy exerts a strong impact on symptoms, however, nor do they modify the underlying disease progression.
Biogen is co-developing another anti-amyloid Alzheimer’s drug, lecanemab, with Eisai. Phase 3 results are expected this fall; analysts view its potential as significant.
Asked what its scale-back of Aduhelm’s commercial infrastructure says about its expectations for the coming lecanemab data, Biogen’s management confirmed that the drawdown was not a reflection on its enthusiasm for the lecanemab program, or for Alzheimer’s in general.
Based on the lecanemab results, the company said it plans to submit for full FDA approval by the first quarter of 2023 – and to possibly scale up commercially again. Vounatsos noted, however, that Biogen “could not afford to keep the [sales] team, unfortunately, for that many months.” He added that the company’s “sentiment for lecanemab does not change, to be clear.”
Beyond Aduhelm and lecanemab, Biogen has other Alzheimer’s assets in the wings, including an antisense oligonucleotide targeting tau (BIIB080) and a small-molecule inhibitor of O-GlcNAcase (BIIB103). Several others have yet to be disclosed..
Then there’s Eli Lilly’s donanemab, a similar drug to Aduhelm and lecanemab which has shown promise in treating early-stage Alzheimer’s disease. The drugmaker filed for FDA approval last fall based on a mid-stage trial and, as a Phase 3 study continues, Lilly expects a decision in early 2023.
3. Neuroscience remains a risky endeavor. The fallout from Biogen’s commercial flop also led to speculation about where the biotech will take its R&D strategy. Some analysts believe the firm needs to chart a less-risky R&D path forward.
“The view from the outside world has been that [Biogen’s] pipeline has always been a little bit high-risk-high-reward, and that’s probably not that surprising just because this is CNS,” said Leerink’s Marc Goodman on the investor call.
But when asked whether Biogen will take this opportunity to diversify away from CNS, the response from interim R&D head Priya Singhal was a firm one: “We’re staying in neuroscience.”
Nevertheless, Goodman pressed the issue in a follow-up research note, posing two questions: “Neuroscience is higher up on the risk curve than most biopharma therapeutics areas, so how far outside of CNS will the company take its franchise? Is it time to add an additional strategic vertical area of focus?”
Biogen signaled an openness to assets similar to neuropsychiatry agents zuranolone and BIIB104. But it needs to find new areas of growth.
Spinraza, a drug for spinal muscular atrophy which was approved in 2016, brought in $1.9 billion in sales last year, a 7% decline from the previous year. MS drug Tecfidera, sanctioned in 2013, saw peak annual sales of $4.4 billion in 2019 before starting a decline due to generic competition.
Meanwhile Biogen’s pipeline is heavily concentrated in hard-to-treat diseases such as Parkinson’s and amyotrophic lateral sclerosis (Lou Gehrig’s disease), which analysts say are longshots to prove efficacious or worthy of approval.
Indeed, neuroscience remains a risky bet. Until now, Biogen’s assumption has been that the upside made that R&D strategy worthwhile. Now it’s an assumption the company’s next CEO will need to reexamine.
