Biogen’s Leqembi Receives Full FDA Approval for Alzheimer’s Treatment


Biogen Inc.’s stock (BIIB, -0.31%) saw an initial increase of about 2% in premarket trading on Friday, following the recent granting of full approval by the U.S. Food and Drug Administration (FDA) for Leqembi, the company’s groundbreaking Alzheimer’s disease treatment developed in collaboration with Eisai Co. Ltd. (ESALF, +1.20%).

This milestone achievement ensures that Leqembi will now be eligible for Medicare reimbursement, making it the first drug that has demonstrated the ability to slow the progress of Alzheimer’s disease, rather than merely addressing its symptoms.

In its announcement on Thursday, the FDA specified that Leqembi’s label will include a boxed warning regarding amyloid-related imaging abnormalities (ARIA). While these abnormalities typically have no symptoms, in rare cases they can lead to life-threatening brain swelling.

Market analysts at Oppenheimer maintain their optimistic outlook on Biogen, reiterating their outperform rating on the stock. However, they acknowledge that Leqembi’s boxed warning may result in increased scrutiny for donanemab, a rival product developed by Eli Lilly & Co. (LLY, -0.53%). They eagerly anticipate more information on donanemab’s efficacy and safety, particularly when stratified by ApoE4 status, which is expected to be revealed at the upcoming Alzheimer’s Association International Conference (AAIC) from July 16 to 20.

On the other hand, Wedbush adopts a more reserved stance, reiterating their neutral rating on Biogen stock. Analyst Laura Chico notes that logistical challenges could potentially impact the adoption rate of Leqembi. Despite this, Wedbush does not make any changes to its Leqembi estimates following the FDA update. Chico emphasizes that this phase marks a significant period of transition for Biogen, as its flagship products face increasing competition and its new CEO, Chris Viehbacher, strives to reshape both the cost structure and risk profile of the company’s product portfolio.

As of now, Biogen’s stock has experienced a 1.2% decline. However, it has shown a year-to-date gain of 3%, compared to the S&P 500’s 15% increase.

This full FDA approval for Leqembi highlights a major breakthrough in the field of Alzheimer’s treatment and sets the stage for future advancements in slowing down the debilitating disease.

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