Successful Alzheimer's Data Would Have Placed Roche At Two-Year Competitive Advantage

  • Before the markets opened on Monday, Roche Holdings AG RHHBY reported disappointing topline results from the Phase III GRADUATE-1 & 2 of gantenerumab in mild cognitive impairment due to Alzheimer's disease (AD). 
  • The update places Eisai Limited ESALY and Biogen Inc BIIB in the box seat competitively, with the CLARITY-AD trial of lecanemab reporting a 27% improvement on CDR-SB at 18 months and hitting on all key secondary endpoints. 
  • Related: Roche's Alzheimer's Flop Trial Removes One Competitor, But Reimbursement Debate Lingers.
  • If the GRADUATE-1/2 studies were positive, showing a similar cognitive benefit to lecanemab, then Roche would have at least a two-year competitive advantage with a subcutaneously dosed therapy over Eisai, Biogen's, and Eli Lilly And Co's LLY intravenous products. 
  • With positive lecanemab data, William Blair believes that a large part of the multiple expansion will rely on securing full FDA approval and overturning the restrictive CMS NCD policy to secure broad Medicare Part B reimbursement. 
  • Beyond lecanemab, the company could have success with additional pipeline assets in depression, neuropathic pain, stroke, or ALS, and we expect it to be active on the business development front. The analyst continues to rate shares Outperform.
  • Price Action: BIIB shares closed at $299.78 on Tuesday.
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