It was nearly two decades since FDA last approved a new drug treatment for Alzheimer’s and those treatments that until now were available did nothing to affect the underlying cause of the disease, at best they improved some of the symptoms and came with significant side effects. Aduhelm on the other hand targets amyloid-beta, protein deposits that emerge alongside memory loss symptoms and signs of destruction of neuronal cells and synapses in the brain. Thus amyloid-beta is believed to play a key role in physiology of the disorder. Clinical evidence clearly supports Aduhelm’s ability to reduce amyloid-beta so therefore the drug must have an affect on dementia-related symptoms of the Alzheimer’s, right?

Well, here the story gets complicated. Firstly, because other drug candidates with the same approach as Aduhelm has failed to slow down the onset of the disease and reduce clinical symptoms. And secondly, that was the initial story with Aduhelm as well, putting the whole hypothesis of amyloid-beta as a driver of disease into doubt.  Two identical large Phase 3 studies with Aduhelm were stopped early due to lacking evidence of clinical improvement in 2019. Then an analysis of certain patients in one of the studies that were kept on treatment on a higher dose did show some signs of slowing the disease. And this was the data that Biogen brought to the FDA during the summer of 2020 and subsequently won an approval on.

Objectively, the underlying clinical evidence in support for the use of the drug is weak. HHowever, the need for new drugs in Alzheimer’s is huge so the FDA opted to try to quench that huge need by a so-called accelerated approval. This means that the agency expects the company to conduct confirmatory study to determine the potential benefits of Aduhelm while on the market. It should be noted though, that such a study could take several years to complete. Another issue is the health-economic impact of the introduction of a drug with modest-at-best impact of patient outcome. Biogen announced a list price of USD 56,000 per patient per year. Even if only a small portion of the 6 million people affected by Alzheimer’s in the US alone are prescribed Aduhelm it would still constitute a significant uptick in healthcare spending. Some early sell-side analyst estimates following the approval point to approximately USD 7 billion in revenues in 2025 for the US Aduhelm franchise.

Following the approval, Biogen stock closed 38% up Monday whereas Eisai closed 19% up. The news also had a ripple effect on the whole biotech sector with Nasdaq Biotech Index (NBI) moving up 3.6% on the day. In parallel, large pharma companies with clinical stage amyloid-beta candidates for Alzheimer’s such as Eli Lilly and Roche also saw noticeable upticks. Lilly closed more than 10% up.