Eisai will collect a royalty of 2% on sales of Aduhelm, rising to 8% once annual sales pass $1 billion. That, in short, is the new price of an old partnership. On March 14, 2022, the Tokyo drugmaker and Biogen of Cambridge, Massachusetts, said they were rewriting their deal on aducanumab, the Alzheimer’s drug sold in the United States as Aduhelm, while leaving their work on a second drug untouched.
The change takes effect on January 1, 2023. Until then Eisai shares global profits and losses on the drug with Biogen, with a ceiling on what it spends on the drug in 2022. After that date it takes only the royalty and no further part in the drug’s economics. Biogen, whose decision-making rights already carried the final say, gets sole control of decisions and commercialization worldwide, effective immediately.
Why the reshuffle
Aduhelm has not sold. Biogen booked $1 million in revenue from it in the final three months of 2021, according to BioPharma Dive, for a product that arrived with multi-billion dollar sales expectations. Doctors and some medical centers doubted that it works, and its high price put off some insurers. Then came a harder blow. The agency that runs Medicare floated a coverage policy for Aduhelm and similar drugs that was very tight, and planned to make it final by April.
Biogen had already announced plans to cut half a billion dollars in expenses, with about $350 million of that to land in 2022. Shares fell 5.5% in early trading on the day it reported. The company said further cuts would follow if Medicare coverage stayed as tight.
Michel Vounatsos, Biogen’s chief executive, said the amended agreement “will increase operational efficiency and agility in addressing market developments, including the final determination of CMS on coverage of ADUHELM.”
Lecanemab carries on
The second drug, lecanemab, is where both companies are putting their weight. Nothing changes there. Eisai still leads development and regulatory submissions around the world, holds the final say, and books all sales. Both firms co-promote the product and split the economics equally, so Biogen records a 50% share of profit and loss.
One thing does change: the supply agreement for lecanemab, which stretches from five years to 10. Biogen will make the drug substance at its plant in Solothurn, Switzerland, with the aim of giving reliable commercial supply worldwide.
Sources
- Biogen and Eisai amend collaboration agreements on Alzheimer's disease treatments (BioSpace, 14 March 2022)
- Biogen's Alzheimer's drug sales remain slow as company warns of further cost cuts (BioPharma Dive)
