USA – Biogen and its long-term partner Eisai have renegotiated their agreement for Aduhelm, an Alzheimer’s disease drug that was controversially approved in the United States last June.

Biogen CEO Michel Vounatsos said in a statement Monday that the revised agreement will allow his company to respond more effectively and quickly to “market developments,” including an important Medicare coverage decision expected next month.

Aduhelm’s sales have been dismal thus far, despite the fact that it is the first Alzheimer’s drug approved in the United States to treat what many researchers believe to be the disease’s root cause.

Last year, Biogen earned US$3 million in Aduhelm revenue, far less than Wall Street analysts predicted.

Alzheimer’s disease, which causes a progressive decline in brain and physical function, affects an estimated 6 million people in the United States.

With few treatment options, analysts predicted that the first medicine approved to treat the disease itself, rather than just its symptoms, would quickly become a billion-dollar product.

However, this has not been the case. Many doctors have been hesitant to prescribe Aduhelm, and insurers have been hesitant to cover it, due to the drug’s high price, the complicated and contradictory evidence generated in clinical trials, and the unusual events that occurred before it was submitted to regulators.

This resistance has dampened expectations about Aduhelm’s use and sales for Biogen and Eisai, which have each set aside US$600 million for commercial launch activities.

The restructuring reflects Aduhelm’s deteriorating commercial prospects. When Aduhelm became the first FDA-approved Alzheimer’s drug in about 20 years last June, the question wasn’t if it would sell more than US$1 billion, but when.

Furthermore, based on existing clinical trial data, drug reviewers in Europe and Japan have declined to approve Aduhelm. Aduhelm only made US$1 million in sales in the fourth quarter of 2021.

The tide may turn if Aduhelm obtains a favorable policy from the Centers for Medicare and Medicaid Services, which, as the government insurance program for people 65 and older, is responsible for the majority of patients eligible for the drug.

However, a draft policy issued by the agency in January proved to be extremely restrictive, limiting coverage to only those patients who participate in a rigorous clinical trial.

Eisai has been Biogen’s long-term collaborator in Alzheimer’s research, working on both Aduhelm and another, experimental treatment called lecanemab, which the companies recently decided to submit for approval as well.

Revised terms details

According to the new terms, Eisai will no longer share global profits and losses on Aduhelm and will instead receive tiered royalties based on net sales of the drug.

The royalty rate will begin at 2% and can increase to 8% if annual sales exceed US$1 billion. This payment structure goes into effect on January 1, 2023.

Biogen, on the other hand, will retain global commercialization rights and will be solely responsible for all Aduhelm decisions, beginning immediately.

Aside from Aduhelm, Biogen and Eisai announced that they have revised a lecanemab supply agreement, extending it from five to ten years.

The agreement requires Biogen to produce enough of the drug to ensure a “reliable commercial supply worldwide.”

The companies stated that they will continue to collaborate on the development and commercialization of lecanemab and that profits and losses will be shared equally.

Meanwhile, struggling with slow Aduhelm uptake, Biogen has launched a restructuring plan and recently started laying off employees.

Liked this article? Sign up to receive our regular email newsletters, focused on Africa and World’s healthcare industry, directly into your inbox. SUBSCRIBE HERE