CAMBRIDGE, Mass. - Biogen Inc. (NASDAQ:BIIB) has announced a strategic shift in its Alzheimer's disease (AD) treatment efforts, discontinuing its ADUHELM (aducanumab-avwa) program to concentrate on advancing LEQEMBI (lecanemab-irmb) and other potential treatments. The decision to halt ADUHELM's development and the ENVISION clinical study is not due to safety or efficacy concerns but is part of a broader reprioritization within the company's AD portfolio.
ADUHELM, which received accelerated approval from the U.S. Food and Drug Administration in June 2021, will no longer be developed or commercialized, and its licensing agreement with Neurimmune has been terminated. The rights to aducanumab will revert to Neurimmune. Biogen has recorded a one-time charge of approximately $60 million related to the program's closure in the fourth quarter of 2023.
The company is now focusing on LEQEMBI, which has received traditional FDA approval in the U.S., and accelerating the development of new treatment modalities, including its ASO targeting tau (BIIB080) and an oral small molecule inhibitor of tau aggregation (BIIB113). The resources from the discontinued ADUHELM program will be redirected to these efforts.
Christopher A. Viehbacher, President and CEO of Biogen, stated that ADUHELM's groundbreaking discovery has paved the way for a new class of drugs and reinvigorated investment in the field. Biogen's partnership with Eisai remains central to the development and commercialization of LEQEMBI, with Eisai holding final decision-making authority.
The company began a strategic review of its R&D efforts in January 2023, including exploring potential partnerships or external financing for ADUHELM, but did not secure such arrangements. Despite this, Biogen remains committed to building a leading Alzheimer's disease franchise and is grateful for the contributions of trial investigators, healthcare providers, advocates, patients, families, and Neurimmune.
This news article is based on a press release statement from Biogen Inc.
InvestingPro Insights
As Biogen Inc. (NASDAQ:BIIB) shifts its strategic focus within the Alzheimer's disease treatment landscape, the company's financial health and market performance offer additional context for investors. Biogen is recognized as a prominent player in the Biotechnology industry, which is reflected in its stable market capitalization of $35.8 billion. The company's commitment to profitability is underscored by analysts' predictions and recent performance, with Biogen being profitable over the last twelve months as of Q1 2023.
An InvestingPro Tip highlights that Biogen's stock generally trades with low price volatility, indicating a potentially lower risk profile for investors who value stability in their portfolio. Additionally, Biogen's strong cash flows, which can sufficiently cover interest payments, suggest a robust financial position that supports ongoing R&D investments and strategic pivots like the one currently undertaken with ADUHELM and LEQEMBI.
Key financial metrics from InvestingPro Data reveal a P/E ratio of 24.4, with an adjusted P/E ratio for the last twelve months as of Q3 2023 at a lower 18.9. This could indicate that the stock is more attractively valued on a historical earnings basis. Moreover, the company's gross profit margin stands at a healthy 75.12%, emphasizing its ability to maintain profitability despite revenue challenges, with a slight revenue growth of 0.87% in Q3 2023.
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