Eisai and Biogen throw good money after bad

The companies’ decision to start a 1,500-patient Alzheimer’s disease study defies logic.

After yesterday’s scrapping of aducanumab studies confirmed the futility of the beta-amyloid hypothesis in Alzheimer’s disease a pause for reflection was in order. Instead, the failed project’s makers, Eisai and Biogen, have decided to plough straight into a pivotal trial of the similarly acting BAN2401.

Perhaps the companies are suffering from gambler’s fallacy. On the other hand, the industry has already blown several billion dollars on failed Alzheimer’s trials, occasioning $70bn of investor value destruction in the process, so a few more million sunk into yet another doomed study looks like a drop in the ocean.

Not only have all beta-amyloid project readouts to date failed, these setbacks include BAN2401 itself: the asset, licensed from Bioarctic, had already flunked phase II. And Biogen vaguely talking up a purported subgroup benefit did not prevent a share price collapse last October when toxicity fears underlined the fact that the project probably had no therapeutic window.

Yet Eisai and Biogen today vowed to push BAN2401 into a registrational trial in no fewer than 1,566 subjects with mild cognitive impairment or mild Alzheimer’s. This will test 10mg/kg – the same high dose that phase II revealed to cause ARIA-E imaging abnormalities, a sign of cerebral oedema, in 14.6% of patients.

$1.2bn... so far

Biogen recently revealed that development of aducanumab, BAN2401 and elenbecestat (another Alzheimer’s project) had cost $1.2bn over the past three years. A 1,500-patient trial will not be cheap, but its cost will barely move the needle relative to the cash burned already.

And going into the aducanumab setback the industry’s failures with previous amyloid-beta projects had resulted in $43.6bn of single-day market cap losses. Biogen and Eisai’s valuations yesterday crashed by $18.4bn and $8.1bn respectively, so the combined total now stands at a sorry $70.1bn.

With every setback the industry’s protestations become less credible. Roche’s crenezumab was supposed to work because it was an IgG4 isotype MAb, and when it failed this was blamed on it being an IgG4 – unlike aducanumab. On aducanumab’s flop Bioarctic yesterday stated: “aducanumab and BAN2401 are based on different antibodies”.

The Swedish group’s statement also somehow managed to construe BAN2401’s questionable benefit on an unvalidated exploratory phase II endpoint, with ARIA-E toxicity, as “robust ... slowing of clinical decline with good tolerability”.

Wilson Cheung, a private biotech investor, expressed the view of many that all amyloid-beta studies should be terminated immediately, and the call today was echoed by analysts from Leerink and Mizuho.

So why do companies like Biogen and Eisai persist, apparently in the face of all logic?

The gambler’s fallacy is the mistaken belief that if something with a fixed probability has happened infrequently during a given period then it will happen more frequently in future. Thus, one line of thinking goes, sooner or later a beta-amyloid MAb will succeed in the clinic.

However unlikely this is, many fund managers will want to be in on the trade, and might want to retain a small exposure to the vague possibility that against the odds, and a few more billion dollars down the road, it just might happen.

Share This Article