On the one hand, Biogen is at the forefront of neuroscience progress, launching Alzheimer’s drug Leqembi, which recently won accelerated approval, and eyeing a second — its collaboration with Sage on the depression drug zuranolone. On the other hand, its multiple sclerosis portfolio has been called “a melting ice cube” and recent efforts to inject new growth hit a wall with the failed 2021 launch of Alzheimer’s drug Aduhelm.
In a fireside chat on the first day of the J.P. Morgan Healthcare conference in San Francisco, Viehbacher spoke about his priorities for getting Biogen’s house in order. While extreme measures may be ruled out, he’s taking a hard look at costs.
Biogen has been a “very narrowly focused company on MS, and very successful. But of course, that is now something we’re calling basically a ‘melting iceberg,’” he acknowledged. “My job, as I see it, is to restore the company to sustainable growth.”
Biogen’s two biggest opportunities are the aforementioned launches. On Leqembi, which Biogen co-promotes 50-50 with Eisai, the CEO said that in the U.S. Eisai is taking the lead on deploying the field force’s initial wave. Biogen is contributing to marketing and on planning additional clinical studies as the firms build up an Alzheimer’s business together over the long-term.
Viehbacher said one challenge in the marketing area is to explain Leqembi’s benefit to patients in a way that helps them appreciate the “full story” of its impact. The general public, he said, has a view that Alzheimer’s is “a little bit of memory loss” and “doesn’t fully understand that this is a fatal, progressive disease” with a massive burden on caregivers.
“What I look at from more of a commercial point of view is the activities of daily living,” he said, meaning not just memory loss but personal care, the ability to continue hobbies and be active. “[Leqembi] had a 37% improvement in that.”
But this launch entails no mere educational campaign. Leqembi has all the hallmarks of a specialty drug but with the volume of a primary care product. “It’s not really a reach-and-frequency model,” as Viehbacher put it.
To get diagnosed, patients will require a PET scan or lumbar puncture, and they must get three MRIs over the first six months. The drug is infused every two weeks (the companies have a subcutaneous version in the works) and could have a potential patient population in the millions. At a cost of $26,500 per year, that could have quite an impact on the Medicare budget.
“There’s a whole element of how the healthcare infrastructure has to evolve for this,” he said, adding that the firms are going to carefully work through the Medicare budgetary issues. Eisai, for its part, has estimated reaching 100,000 patients with early Alzheimer’s after the first three years.
On the reimbursement front, Viehbacher said Eisai is also taking the lead on engaging with the Centers for Medicare and Medicaid Services to reconsider its national coverage decision on amyloid-antibody drugs, so he’s not privy to the details around discussions with the government payer.
Eisai filed for full approval with the Food and Drug Administration last Friday evening, but the timing of the FDA’s review is unknown. Unsurprisingly, Viehbacher is optimistic that full approval is forthcoming and that CMS will reimburse, given the statistically significant results seen on the CLARITY-AD study, safety issues notwithstanding.
Naturally, the new CEO also wants to reduce the impact of erosion — that melting ice cube — by lowering the cost base.
“We have $5 billion less in profit than in 2019. That hasn’t completely percolated through the company,” he observed.
While Biogen has slimmed down already thanks to its $1 billion cost-cutting exercise, Viehbacher was honest about bringing “capital discipline” to its culture, especially regarding existing businesses, like MS, while also wringing late-life cycle growth from SMA drug Spinraza.
“The MS franchise actually is quite interesting, because there are still a lot of people who love Tysabri, who love Avonex,” he said. “We have to look at, ‘Are we really spending the right amount of money on that?’ We’ll have to look at our cost base.”
For one, marketers may be spending too much promoting the aging MS franchise, he said, adding that it’s hard for people to give up something that’s been the “bread and butter” of the company for most of its 40-plus-year existence. Nevertheless, “We can do a better job on profitability,” he said.
On Spinraza, about which analysts are running out of optimism, Viehbacher said the “low-hanging fruit” — i.e., the younger population — has mostly been addressed, with children getting screened at birth for the disease. But in the adult population, “I actually think there’s a reservoir of growth there,” he said, and the ability to tap into it “through [commercial] blocking and tackling.”
Although the Phase 4 confirmatory trial for Aduhelm was terminated, Viehbacher said the fact that the company continues to spend money on the drug isn’t lost on him and that he may take a “return-on-investment” approach.
“We have to do a confirmatory study by the terms of the NDA [new drug approval],” he said. “So if we don’t do it, we lose the NDA. But if we lose the NDA, maybe this is an asset that has value to others, and we have to evaluate that.”
And what of M&A plans? Viehbacher said he intends to focus on “getting the things right within the company” the first half of this year before turning his attention to external growth. “You don’t want to do an acquisition unless you’ve got your own house in order,” he added. “I don’t think we’re quite there yet.”
Beyond those areas, he was asked if any strategic shifts are in the works.
“No radical left turns,” was the response, other than “some redefinition of what we’re about.” Biogen, he noted, has typically presented itself as a neuroscience company. But its MS heritage gives it “some legitimacy to go toward immunology,” to use zuranolone as a springboard to go further into psychiatry, and with Spinraza to move deeper into neurodegenerative and rare diseases.
“I don’t see us getting into oncology or cardiology, but I do think we’ll widen things a bit,” he predicted.
Ditto for Leqembi giving Biogen a legitimate shot at developing an Alzheimer’s franchise with partner Eisai. On the opportunity with Leqembi, he noted, “If we get that right, that’s going to account for an awful lot of the new Biogen.”