Biogen saw its stock drop over 10% on Wednesday as the US government declared that Alzheimer's medicines, including Biogen's Aduhelm, will be covered only to a limited extent. This is a setback for the contentious medication, which was approved last year.
Biogen had hoped that the government's decision to cover Aduhelm would help boost sales and offset the revenue loss from some of its primary medications due to increased competition.
Analysts believe that if the US Centers for Medicare and Medicaid Services (CMS) draught ruling is approved, Aduhelm sales will be minimal in 2022 and 2023.
According to Jefferies analyst Michael Yee, the clinical trial enrollment requirement is another hurdle that presents more roadblocks for having access to Aduhelm.
After receiving FDA clearance in June, Aduhelm became the first new treatment for the memory-robbing condition in over two decades, despite the agency's outside experts' opinion that Biogen had not established the treatment's therapeutic value.
After slower-than-expected U.S. sales and hospital complaints that its high cost was not worth its benefits, the manufacturer reduced the price of Aduhelm to $28,200 for an average-weight individual last month.
The CMS, the health agency that oversees Medicare, is expected to make a final coverage decision in April, although it could alter as it solicits feedback from businesses and consumers.
The final coverage terms are expected to apply to all therapies in the class, including those being developed by Eli Lilly, Roche Holding, and Biogen's Japanese partner Eisai.