Biogen's Alzheimer’s drug could generate ‘$8 billion in peak sales’: Analyst

Mizuho Americas Senior Biotech Analyst Salim Syed joins Yahoo Finance Live to discuss encouraging Phase 3 data from Biogen’s Alzheimer’s treatment lecanemab, how many sales the drug could generate, and what this means for the pharmaceutical industry.

Video transcript

JULIE HYMAN: Biogen shares surged by almost 40% yesterday following the release of new data of a new experimental drug to treat Alzheimer's. The shares pulling back a little bit today, but we had a raft of analysts come out with positive commentary on this development. One of the Mizuho Americas senior biotech analysts, Salim Syed-- and he is joining us now. Salim, thanks for being here. First of all, I think what laypeople are trying to understand is the difference between this new drug and Aduhelm, which failed spectacularly in terms of public perception, and in terms of reaction from regulators. What are the key differences that people need to understand here?

SALIM SYED: Yeah. First, thanks for having me. Look, totally fair question. Aduhelm received a totally different reception into the marketplace on their data versus lecanemab-- the data that we got from Biogen and ASI a couple of days ago. But look, this is why we do clinical trials, right? In the case of Aduhelm, they ran two Phase III studies. One of them worked, and the magnitude of benefit was actually not too far off than what we saw with lecanemab.

But the other one completely failed, right? And when you have that dynamic playing, it doesn't really give you confidence in the data. What we got with lecanemab a couple of days ago was a little bit more than what we saw with Aduhelm, but the p-value-- this is the statistical p-value-- how much can you believe in the data? That was a really strong p-value. It was 0.0005, which means less than five thousandths of 1% chance that the data that we're seeing was actually incorrect.

JULIE HYMAN: Well, that is definitely encouraging. When we look at that kind of margin for error, it is very low. So what, then, are the implications in real terms for Biogen and its partners here, in terms of how quickly this could get to market, how many patients this could be available to, et cetera?

SALIM SAYED: Look, Aduhelm-- the implications-- there are still some things that we need to work through here, right? One is, obviously, approval. The drug's not yet approved. The PDUFA or the FDA deadline for approval here on an accelerated basis, based on the Phase II data, is going to be January 6, 2023. And obviously, price is another question here that we're going to need to sort out.

But in terms of what this means in terms of uptake, we're currently modeling about $8 billion in peak sales for this drug. This is the number that we're putting into the model that goes to both ASI and Biogen, and gets split. But we're currently putting it at about $8 billion. Now what that means in terms of penetration into the market-- we think Alzheimer's-- in this particular case, the mild Alzheimer's population-- it's currently about a $60 billion temp. So it's a little bit more than 10% penetration into the market.

Now, we'll see if that number is actually correct or not, or if we should move it up or down. We're expecting other data from Eli Lilly in the middle of '23, and Roche in the fourth quarter of this year, which can change that. But that's where we are right now. So the numbers are large.

BRAD SMITH: Even if that total addressable market remains intact, which, I mean, let's be real about this-- this is going to be able to impact, potentially, so many individuals, families' lives as well. It also comes back to what the policy is going to look like that also regulates costs for those end consumers as well. Do you believe that there's going to be any material changes on that front in the near term?

SALIM SAYED: That is one of the questions we're getting from investors right now. What does it actually mean for CMS? Because if you recall, CMS came out about a year ago with a very conservative stance in terms of how it was going to reimburse these beta amyloid-targeting therapies for Alzheimer's. And it put them all in one class. And you needed to be part of a trial or a registry in order to actually get reimbursed for the product.

And this was the case with Aduhelm. But we have a set of convincing data here-- what we believe is convincing. So we may see a turn in that national coverage determination or NCD process by CMS. We'll see how long it takes. It could take up to nine months, we believe. But if that's the case, reimbursement should be easier for this particular product. It will still be up to doctors and patients.

On a risk-reward basis, whether it makes sense to put their patient, or your grandma, or your mom or your dad, or grandfather on this drug, we'll see. But reimbursement, it is one of the key questions right now that the market will have to sort through. But again, the data is convincing. The p-value-- or the statistical significance-- of the data were seen as real. Here, looks good. There's a good shot here that this drug gets reimbursed.

BRIAN SOZZI: Are there competitors working on any similar drugs to what Biogen has made here?

SALIM SAYED: Yeah. I mean, Roche and Eli Lilly are the next two that we're going to get Phase III data from. Roche is going to put up their data in the fourth quarter this year. Now, the market's not anticipating that the data will be positive, necessarily. It hits a different part of the amyloid protein than lecanemab, and even Aduhelm or even Eli Lilly's drug, donanemab. Donanemab-- we're going to get Phase III data for that product in the middle of 2023. So it's a little bit some time away. But that particular product the market seems to be a little bit more excited about.

JULIE HYMAN: Yeah, after this data. Salim, thank you so much. Great perspective here-- helpful perspective for people trying to understand this. Salim Sayed of Mizuho. Appreciate it.