Global Courant
Signage for Eisai Co. at the company’s headquarters in Tokyo, Japan, on Friday, February 3, 2023.
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Shares of Japanese pharmaceutical giant Eisai sank Friday after the company’s Alzheimer’s drug was formally approved by US regulators overnight, raising questions about investor sentiment surrounding the move.
Tokyo-listed shares of Eisai fell more than 8% at one point during Friday trading as investors reviewed the U.S. Food and Drug Administration’s approval of Leqembi, which is jointly produced by its U.S. partner biogen. Eisai shares closed 4.67% lower after taking some of its previous losses.
Leqembi is the first antibody treatment for Alzheimer’s disease to receive full FDA approval. It is also the first drug to receive broad coverage through Medicare.
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The closely watched drug has sparked debate among medical and market experts.
The University of Cincinnati College of Medicine neurologist Dr. Alberto Espay told NBC News that the drug’s treatment, especially the slowing of the progression of the disease, falls below the level that would be considered “noticeable” to a patient.
“The likelihood of brain swelling and bleeding is far greater than any actual improvement,” Espay, who launched a petition in June calling for Alzheimer’s treatment not to be fully approved, told NBC News.
Eisai US CEO Ivan Cheung refuted similar concerns in an interview with CNBC’s “Fast Money”.
“This treatment is safe and effective for Alzheimer’s disease,” Cheung said Thursday.
“The benefit-risk profile is well established in the large late-stage clinical trial and we believe that by year three, approximately 100,000 individuals could be diagnosed and eligible for this important treatment,” he said.
Naomi Kumagai, senior equity analyst at Mitsubishi UFJ Morgan Stanley Securities, told CNBC via email that there were a number of factors at play regarding Eisai’s stock price.
She referred to one Announcement June 1 from the Centers for Medicare and Medicaid Services outlining how people can access Leqembi once FDA approval is granted, as well as a positive result from an advisory committee on June 9.
Given the above, “we think all the positives are built into the share price, so the shares are down today in our opinion,” Kumagi said.
To see a “solid adoption” of the drug, Kumagi highlighted three key areas, noting they wouldn’t happen any time soon. The first would be the approval of a formulation for subcutaneous injection, which would provide an easier way of administration. The second and third are the commercialization of a blood biomarker to detect amyloid beta accumulation and the reimbursement of such a blood biomarker.
