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In late June I surveyed the end of Aduhelm and looked forward concerning prospects for lecanemab. This week Eisai (OTCPK:ESALY) and Biogen (NASDAQ:BIIB) announced that the Phase 3 CLARITY trial, involving 1,795 participants, met primary and key secondary endpoints in early Alzheimer's disease. This is a big deal because lecanemab is established to not only reduce amyloid levels in the brain, but it also reduced clinical decline after 18 months by 27% with a very high level of significance compared with placebo. Perhaps this is the beginning of an effective treatment for early Alzheimer's disease? However there's the devil in the details concerning how this is going to play out in the likely event that lecanemab gets FDA, European and Japanese approval for treating early Alzheimer's before the end of March 2023. Here I explore some issues that need to be considered. There's little doubt that, as has been observed already, the share prices of Eisai and Biogen will be positively affected by this news, but investors might consider how significant this is going to be for the two companies.
Does Eisai's Donepezil give some guidance about how lecanemab approval will play out?
Donepezil (Aricept) was developed by Eisai as in inhibitor of acetylcholinesterase (AChE) for symptomatic treatment of mild to moderate Alzheimer's disease. It has an impact on functional ability, behavior and cognition, but there's not good evidence for improvement in patient quality of life, disease progression or time to institutionalization, although it may have some benefits for caregivers. Donepezil was approved in the US in 1996 and has been marketed by Eisai and Pfizer, with a higher dose formulation getting FDA approval for moderate to severe Alzheimer's disease in 2010. Patent protection for Donepezil expired in 2012 (sales $2 billion), but Donepezil (Aricept) is still used and the market size was still $900 million in 2020, with 5 million Donezepil prescriptions written in the US in 2019. This means that Eisai has a good understanding of the Alzheimer's market and pricing in that market, even for drugs that are not clearly effective.
I suspect that this experience will be useful for Eisai as it charts the approval and marketing of lecanemab. It's clear that a major challenge for acceptance of Aduhelm was the steep $56,000 annual treatment cost. While this wasn't the only problem with marketing of Aduhelm, it surely didn't help.
I'm not sure that basing pricing of a drug on the cost of the current disease management, especially if the drug has limited effectiveness, is a recipe for success. Doubtless Eisai is paying attention and it has made clear that while the partnership with Biogen is a 50:50 share of profits, Eisai will continue to lead development of lecanemab and manage regulatory submissions globally. Eisai has the final decision-making authority, while Biogen manufactures the lecanemab.
Side effects: ARIA (Amyloid-Related Imaging Abnormalities)
A significant reason that Aduhelm failed was a high incidence of ARIA (~40%), a serious abnormality seen by MRI scans and which is a serious (even fatal?) problem for some Alzheimer's sufferers from amyloidbeta targeting drugs.
Lecanemab is a monoclonal antibody which has a similar target to Aduhelm. The CLARITY Phase 3 study made clear that the incidence of ARIA for lecanemab is lower than Aduhelm treatment. Just as is seen with Aduhelm, two kinds of ARIA are observed: ARIA-E involves edema/effusion, while ARIA-H involves cerebral microhemorrhages. Both kinds of ARIA are elevated by lecanemab treatment, with ARIA-E 12.5% treated and 1.7% placebo, while ARIA-H was 17.0% treated and 8.7% placebo. The total incidence of ARIA (-E + -H) was 21.3% in the lecanemab group and 9.3% in the placebo group. Symptomatic ARIA was much lower, with just 2.8% in ARIA-E and 0.7% in the ARIA-H group.
The issue about ARIA is that it's serious and potentially life threatening, so even if it's much less common with lecanemab treatment than with Aduhelm, it may still need to be monitored. This may mean expensive MRI imaging. How that will be managed in treated populations remains to be clarified.
From left field: Long COVID Has An Alzheimer's-like side to it
In an unexpected development of the COVID story, the SARS-CoV-2 virus, which causes COVID, has been found to have code to make proteins that self assemble to form amyloid-like particles that are toxic to nerve cells. The above article in prestigious journal Nature Communications suggests that this feature of the SARS-CoV-2 virus could be behind the "brain fog" observed in some long COVID sufferers.
The above may go nowhere, but what if treatments like lecanemab, which reduce amyloid plaque, could be of value in treating long COVID? With more than 622 million COVID suffers (and probably many more!) long COVID is likely to be the enduring consequence of SARS-CoV-2 infection for tens it not hundreds of millions of people who contracted COVID.
Before you rush off and buy some Eisai or Biogen shares, it's a long bow to connect lecanemab with amyloid plaque caused by SARS-CoV-2, but watch this space.
Conclusion
The news about lecanemab showing for the first time a clear clinical outcome for treating early Alzheimer's disease has not surprisingly set alight the share prices of Eisai and Biogen, with Eisai up 41% and Biogen up 32% in the past five days.
Eisai is driving this and they have a sense of urgency about getting approval in the key global markets of the US, Europe and Japan. It should happen soon. Of most interest to investors in Eisai or Biogen is, assuming market approval, how Eisai plans to manage the roll out. I suspect that this is going to be a good story for both companies, but I don't think that Alzheimer's disease is solved yet. This is just the start. What if the story mutates to also encompass neurological aspects of long COVID? There's something to get excited about.
I'm not a financial advisor, but I've been an observer of and participant in the biotech industry for a long time. I hope my perspective is of interest to you and your financial advisor.
