© Reuters. FILE PHOTO: A sign marks a Biogen facility in Cambridge, Massachusetts, U.S. January 26, 2017. REUTERS / Brian Snyder / File Photo
By Manas Mishra
(Reuters) – Biogen Inc on Wednesday tried to assuage investors’ worries by rolling out a plan for an Alzheimer’s drug being developed with Eisai Co (OTC:) Ltd and promising will learn from the failures of the treatment of Aduhelm.
The new drug, lecanemab, is important to the drugmaker’s growth as it faces competition for some of its blockbuster drugs, including the multiple sclerosis drug Tecfidera.
Company executives said data from a trial of lecanemab is expected in the fall. Biogen (NASDAQ:) and Eisai have applied for fast approval, and the US regulator has set a deadline for January.
“We will learn from Aduhelm where necessary and where possible, and we will source (the launch) at each stage of its commercialization,” said CFO Michael McDonnell.
Last year, Aduhelm became the first Alzheimer’s treatment approved in the United States in decades, but Medicare, the government’s health program for people over 65, has drastically cut back its use use it because of efficiency concerns.
Biogen in May had to significantly withdraw its sale of Aduhelm, which generated $100,000 in the second quarter.
Since the drug was approved last June, the value of Biogen stock has nearly halved.
Shares traded 2% lower on Tuesday even as the drugmaker raised its full-year profit forecast by basing it on Tecfidera sales. Its revenue fell 18% to $397.9 million, but beat expectations of $367.7 million.
“We suspect investors are unlikely to be satisfied with returns from such legacy products,” said Piper Sandler analyst Christopher Raymond.
Biogen now expects annual returns to be in the range of $15.25 to $16.75 per share versus a previous forecast of $14.25 to $16.
Excluding items, it earned $5.25 per share, higher than the $4.06 estimate. The gains were supported by a $500 million stock buyback program, said Wedbush analyst Laura Chico.