© Reuters. FILE PHOTO: A test tube is seen in front of displayed Biogen logo in this illustration taken, December 1, 2021. REUTERS/Dado Ruvic/Illustration/File Photo
(Reuters) – Biogen Inc (NASDAQ:)’s Chief Executive Officer Michel Vounatsos is stepping down, at a time the drugmaker is grappling with Medicare restricting coverage for its Alzheimer’s drug Aduhelm to patients in clinical trials.
Vounatsos, who will continue in his role until his successor is appointed, was named as the CEO in 2016 and has been at the helm as Biogen developed and launched several flagship drugs including spinal muscular atrophy drug Spinraza, multiple sclerosis drug Vumerity and most recently Aduhelm.
Biogen said on Tuesday it was looking at substantially eliminating commercial infrastructure related to the Alzheimer’s drug and plans for more cost cuts, in addition to the current program to save $500 million annually.
Coverage for Aduhelm is restricted to patients in clinical trials, and the company said it will retain minimal resources to make the drug available to patients currently on treatment in the U.S.
The company was betting on Aduhelm, the first new treatment for the memory-robbing disease in nearly 20 years, to act as a buffer as its main revenue drivers face rising competition.
However, Aduhelm has faced multiple hurdles after the U.S. Food and Drug Administration approved it last June under an accelerated approval pathway.
Since then, investigations have been launched into the FDA’s decision taken over objections of its own outside advisers, doctors have held back on prescribing the drug and the U.S. Medicare operator in April decided to limit coverage of Aduhelm under the government insurance plan.
“We think the Street will view tough changes as a move in the right direction for the sake of BIIB sentiment, longer-term spend and need to move forward … the changes have been talked about previously … but the timing was not necessarily expected this soon,” Jefferies analyst Michael Yee said in a note.
Biogen is now counting on its second Alzheimer’s drug lecanemab, which like Aduhelm, has also been developed with Japanese company Eisai Co (OTC:). Ltd.
Biogen plans to complete the rolling submission for lecanemab under the accelerated approval pathway in the U.S. in the second quarter.