Could Biogen’s Stunning Alzheimer’s Drug Victory Only Be Temporary? | The Motley Fool

Biogen (NASDAQ:BIIB) recently won approval from the U.S. Food and Drug Administration (FDA) for Alzheimer’s disease drug Aduhelm. There was an important catch with this approval, though. In this Motley Fool Live video recorded on June 9, Motley Fool contributors Keith Speights and Brian Orelli discuss whether or not Biogen’s victory could only be a temporary one.

Keith Speights: Now, there was an asterisk with the FDA’s approval. The FDA granted what’s called accelerated approval for Biogen’s Alzheimer’s disease drug.

Brian, what does accelerated approval mean? Is it possible that Biogen’s stunning FDA when could only be a temporary victory?

Brian Orelli: Accelerated approvals are based on preliminary data. It’s often surrogate endpoints or small trials with limited numbers of patients. Surrogate endpoint means that it’s something that predicts a clinical benefit.

In cancer, that would be like progression-free survival. How long does it take for the tumor to start growing, but what we actually care about is how long does the patient live for. Progression for survival would be the surrogate endpoint for overall survival. Lowering blood pressure would be another example that reduces the likelihood of having a stroke, so you can get approval based just on lowering blood pressure.

In this case, Biogen’s drug was able to reduce amyloid plaques, and the actual thing that we care about is improving cognition. An accelerated approval requires a company to run a confirmatory study. Biogen has to run another study and if it fails, the FDA could pull it off the market.

In theory, it’s a temporary victory. In reality, the drug was going to be on the market for years because it’s going to take maybe as much as a year to set up the study. I’m sure the FDA want them to go faster, but it does take a while to design a study.

I’m not 100% sure how the heck they’re going to actually run this study because ideally, you’d like to compare it to placebo, but who would go into the study if, let’s say, they do 2-to-1 drug to placebo, you still got a third chance you’re getting placebo. If you really just wanted to take this drug, you’d probably just go and get your doctor to prescribe it.

I think that it’s going to be difficult for them to set up the study. Then they’ve got to run the study, and that’ll take a couple of years to enroll and get everybody through. Let’s say we’re looking at cognition after a year, so the last person is going to get enrolled a couple of years later and then we’ll have to follow the last person for a year, and then they got to analyze the data. I think the FDA is giving them nine years or something, I think I read yesterday —

Speights: Yeah.

Orelli: — to actually run the clinical trial. I think it’s going to be on the market for quite a while. Even then, I think we’ve seen some cancer drugs have failed their confirmatory trials and are still approved to the indication. Even if that clinical trial fails, they’ll still be on the market for a little bit longer because it’ll take a while for the FDA to actually run through its process of pulling it off the market.

Of course, as soon as the clinical trial data comes out, presumably, sales would decline because doctors probably wouldn’t be prescribing a drug that had failed the most recent study.

Then [laughs] maybe I can hop on my soapbox here for a minute and we can talk about the surrogate endpoints because that’s really what has me irked because the amyloid hypothesis, the idea that amyloid, that’s the plaques of the misfolded proteins in the brain causing Alzheimer’s disease, is really an unproven and it has been for years. That’s just whether amyloid causes Alzheimer’s disease.

What we really don’t know is whether removing these plaques helps patients, and in fact, I think we’ve had studies where the drugs have lowered the plaque levels and haven’t improved cognition. I’m just dumbfounded by this decision. It just seems like the FDA really wanted to improve the drug, but they felt like they couldn’t give the full approval, so then they approved it based on surrogate endpoints.

But I don’t think those surrogate endpoints are valid at this point. I don’t think we have enough data to say that the same way where progression-free survival, most of the time leads to overall survival, or lowering blood pressure most of the time, or almost all the time leads to lower likelihood of stroke. I think this just opened a whole new can of worms.

Speights: Yeah. Let me say you’re not the only person irked, as you said, about this decision. It’s highly controversial. I read that one of the FDA’s advisory committee members who had been on the panel for quite a long time resigned in protest over this decision.

To make matters worse, Brian, Biogen came out and announced an astonishingly high price tag for this Alzheimer’s disease drug. I think most analysts were expecting in the range of $10,000-$25,000 for the drug. They came out with a price point of $56,000. Why in the world would the company do that?

Orelli: I think they did it because they’re not expected to have that greater sales because their label is horrible and it doesn’t show that it actually helps patients. I think they’re not going to have that many patients on the drug. This would be the same reason why often indications have really expensive drugs because there’s not that many patients and therefore, you have to charge a lot to justify the development of the drug.

Speights: I think you’re exactly right. To me, it’s surprising that Biogen came out with such a higher price. I wouldn’t have been shocked at all had they come out with a price that was around the upper end of the range that exports were looking for, but to come out with a price that was more than double the upper end of the range that most experts were projecting, to me, was surprising. I think it does nothing but stir this controversy up even more.

Orelli: Before the decision came out, somebody asked me about what am I going to be looking for? One of the things was the price tag. My view was the lower the price, the more bullish I’m going to be because I think that’s saying that Biogen thinks that it’s going to be used a lot. The higher the price, the less bullish I was going to be because that, to me, means that Biogen doesn’t think it’s going to be used by very many patients.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.

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