Eisai and Biogen's Alzheimer's drug gets positive CHMP opinion

TOKYO and CAMBRIDGE, Mass. - Eisai Co., Ltd. (TYO:) and Biogen Inc. (NASDAQ:) have announced that the Committee for Medicinal Products for Human Use (CHMP) of the European Medicines Agency (EMA) has recommended approval for their Alzheimer's drug, lecanemab. This recommendation is for the treatment of adult patients with mild cognitive impairment and mild dementia due to Alzheimer's disease, specifically for those who are not carriers or are heterozygotes of the apolipoprotein E ε4 gene with confirmed amyloid pathology.

This positive opinion from the CHMP comes after Eisai requested a re-examination of a previous negative opinion issued in July 2024. The European Commission is expected to make a final decision on the marketing authorization application of lecanemab within 67 days from the receipt of the CHMP's opinion.

Lecanemab works by targeting and reducing amyloid-beta aggregates in the brain, which are associated with Alzheimer's disease. The drug has been approved in several countries including the United States, Japan, and Great Britain and is under review in 17 other countries.

The CHMP's recommendation is primarily based on Phase 3 data from Eisai's global Clarity AD clinical trial, which met its primary endpoint and all key secondary endpoints with statistically significant results. In the trial, lecanemab reduced clinical decline by 31% at 18 months compared to placebo. The most common adverse reactions reported were infusion-related reactions, brain swelling (ARIA-H), headache, and ARIA-E.

Alzheimer's disease affects approximately 6.9 million people in Europe, a number that is expected to nearly double by 2050. The progression of the disease presents increasing challenges for those living with it and their care partners, highlighting the urgency for new treatments.

Eisai leads the development and regulatory submissions for lecanemab globally, with both Eisai and Biogen co-commercializing and co-promoting the product. Eisai has the final decision-making authority.

This news is based on a press release statement and reflects the current stage of lecanemab's regulatory review process in the European Union.

In other recent news, Biogen has been the focus of several financial firms' analyses due to its third-quarter performance and future projections. Citi initiated coverage on Biogen with a neutral rating and a price target of $190, reflecting a cautious stance on the biotech company's financial outlook. The firm acknowledged potential for revenue stabilization from legacy franchises and new product launches, despite average revenue declines projected for 2024-2026.

Several financial firms, including TD Cowen, Oppenheimer, and RBC Capital, have adjusted their price targets for Biogen, while maintaining positive ratings. TD Cowen projects a return to growth for Biogen, driven by the performance of its drugs Leqembi and Skyclarys, with a 2% revenue CAGR and a 10% EPS CAGR through 2030. Oppenheimer also lowered its price target to $255 from $270 while maintaining an Outperform rating, citing Biogen's strong quarterly results, which exceeded expectations.

RBC Capital Markets lowered its price target from $269 to $260, while retaining an Outperform rating. The firm noted positive developments such as the international performance of Leqembi, enhanced operating leverage, and a focus on product pipeline. However, Morgan Stanley (NYSE:) downgraded Biogen from Overweight to Equalweight due to a disappointing launch of Leqembi and lowered its price target to $204 from $285.

Despite facing challenges, Biogen is making strides in its strategic objectives, with a focus on sustainable growth and pipeline expansion. The company's pipeline potential peak sales are estimated at $14 billion, including dapirolizumab and felzartamab. These recent developments highlight Biogen's commitment to strategic growth and innovative product development.

InvestingPro Insights

As Biogen (NASDAQ:BIIB) receives positive news regarding the potential approval of lecanemab in Europe, it's worth examining some key financial metrics and insights from InvestingPro.

According to InvestingPro data, Biogen's market capitalization stands at $24.52 billion, reflecting its significant presence in the biotechnology sector. The company's P/E ratio of 15.18 suggests a relatively moderate valuation compared to some of its peers in the industry.

InvestingPro Tips highlight that Biogen's net income is expected to grow this year, which could be partly attributed to the potential success of lecanemab and other drugs in its pipeline. Additionally, 10 analysts have revised their earnings upwards for the upcoming period, indicating growing confidence in the company's financial prospects.

Interestingly, InvestingPro Tips also point out that Biogen's stock is trading near its 52-week low and the RSI suggests it may be in oversold territory. This could present an opportunity for investors who believe in the company's long-term potential, especially considering the positive developments with lecanemab.

It's worth noting that Biogen does not pay a dividend to shareholders, instead likely reinvesting profits into research and development of new treatments like lecanemab. This strategy aligns with the company's focus on innovation in the challenging field of neurodegenerative diseases.

For investors seeking more comprehensive analysis, InvestingPro offers additional tips and insights beyond those mentioned here. In fact, there are 8 more InvestingPro Tips available for Biogen, providing a deeper understanding of the company's financial health and market position.

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