Biogen CEO Michel Vounatsos to Step Aside After Alzheimer’s Drug Struggles

Biogen also said it would substantially eliminate the sales infrastructure it built up to support Aduhelm’s launch, which will contribute to other cost-cutting measures intended to provide savings of $500 million annually.

The downsizing is in addition to the $500 million cost-cutting program Biogen implemented in December, and brings the total annual cost-cutting target to $1 billion.

Wall Street analysts once projected Aduhelm to become a blockbuster, achieving billions of dollars in annual sales from some of the estimated six million people in the U.S. living with Alzheimer’s, the progressive neurological disease that gradually robs patients of their memories and self-sufficiency.

But Biogen’s launch of the drug sputtered amid disagreement among doctors about its effectiveness, utility and cost, which was initially set at $56,000 annually before being slashed in half in response to criticism from patient groups and others.

The Cambridge, Mass., company’s market value reached $62.5 billion in the days after Aduhelm was approved in June 2021, but has fallen more than 50% since then as large insurers refused to pay for the drug because of concerns about its effectiveness and side effects.

Last month, Medicare’s parent agency said it wouldn’t routinely pay for Aduhelm except if patients enrolled in clinical trials testing the drug.

Mr. Vounatsos was appointed CEO in 2017. His tenure was marked by the loss of patent protection for the multiple sclerosis pill Tecfidera, Biogen’s biggest product by sales; the launch of an innovative new therapy for infants struck by a rare disease called spinal muscular atrophy; and wild swings in Biogen’s stock price based on Aduhelm’s prospects.

Biogen’s research chief

Alfred Sandrock,

who shepherded Aduhelm’s development, resigned from Biogen last November after more than 20 years with the company.

Biogen shares rose 0.8% in premarket trading on Tuesday.

Biogen has reached “a pivot point, effectively throwing in the towel on Aduhelm and announcing a CEO transition,” Brian Abrahams, an RBC Capital analyst, said in a note to clients. “Though [the] go-forward strategy remains somewhat vague…we believe these changes will be well received over the long term, and give the company a fresh start.”

The company said it would continue to support assistance programs that will provide Aduhelm free to U.S. patients already taking the drug.

Biogen also said it would continue to fund ongoing Aduhelm studies and the start of a planned new clinical trial that was mandated by the Food and Drug Administration as a condition of the drug’s approval last year.

A number of companies, including Biogen, are developing Alzheimer’s treatments similar to Aduhelm, a monoclonal antibody that targets the reduction of a protein called amyloid from the brain. Some researchers believe the build up of amyloid plays a key role in Alzheimer’s.

Biogen and its partner

Eisai Co.

are collaborating on the experimental Alzheimer’s drug lecanemab, and expect to complete an application to the FDA for accelerated approval in the second quarter, Biogen said. Aduhelm was also approved under an accelerated approval, which allows the FDA to approve treatments for serious diseases before they have been fully proven to be effective.

The companies expect a late-stage Phase 3 study of lecanemab to be completed in the fall of this year, and Eisai plans to seek full approval for the drug in the first quarter of next year, Biogen said.

Write to Joseph Walker at [email protected]