Eisai's New Alzheimer's Drug Divides Market Watchers

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Analysts are divided on the prospects for the new Alzheimer's medication from Japanese pharmaceutical company Eisai, and it's unclear how many hospitals will have the necessary diagnostic tools to use it. Lecanemab obtained rapid U.S. Food and Drug Administration approval after being developed with American partner Biogen on January 7. In three years, according to Eisai CEO Haruo Naito, 100,000 American patients will be eligible for the medication.

The medication, known as Leqembi, will cost an average American patient $26,500 annually. This is less than half the price of the company's last Alzheimer's therapy, aducanumab or Aduhelm, which had a rough start in 2021 due to complaints about its high cost. Seiji Wakao of JPMorgan Securities Japan stated, "It's an appropriate price based on the lessons learned from that failure." Leqembi's chances of receiving complete approval are 90%, according to Wakao, who also projects that sales in the United States will peak at $5.4 billion in the fiscal year that ends in March 2033. Leqembi sales, which do not just include those in the United States, are predicted by Kazuaki Hashiguchi of Daiwa Securities to peak at 580 billion yen ($4.5 billion) in fiscal 2032 due to the drug's limitations on how extensively it may be used.

Around 2026 will see the expiration of Eisai's patent on the cancer medicine Lenvima, which currently makes up around a quarter of sales. If Leqembi catches on, the company's earnings may be well-spent. Eisai stock has fluctuated between 8,000 and 8,500 yen this year, ending at 8,394 yen on Friday. After aducanumab got fast approval in the U.S. last year, Eisai's stock price increased by around 60% in just 11 sessions, only to drop when the medication failed to acquire widespread traction. This time, a lot of investors are being more cautious.