Japanese pharma's firm skates 4% even after FDA support for Alzheimer's medicine

July 10, 2023: On Friday, shares of Japanese pharmaceutical firm Eisai sank after the company’s Alzheimer’s medication was formally approved by U.S. regulators overnight, producing inquiries over investor sentiment surrounding the move.

On Friday, Tokyo-listed shares of Eisai dropped by over 8% at one stage during trade as investors assessed the U.S. Food and Drug Administration’s approval of Leqembi, together produced by its U.S. partner Biogen. Eisai shares closed 4.67% lower after paring some of its earlier losses.

Leqembi is the first Alzheimer’s antibody treatment to receive full FDA approval. It is also the first drug to receive broad coverage through Medicare.

The closely watched drug has prompted debate between medical and market professionals.

University of Cincinnati College of Medicine’s neurologist Dr. Alberto Espay told NBC News that the treatment of the drug, specifically the slowing in the progression of the illness, falls below the level that would be considered “noticeable” to a patient.

“The odds for brain swelling and hemorrhage are far higher than any actual improvement,” Espay, who launched a petition in June calling for the Alzheimer’s treatment not to get full approval, told NBC News.

Eisai U.S. CEO Ivan Cheung denied similar concerns in an interview.

“This treatment is safe and practical for Alzheimer’s disease,” Cheung said Thursday.

“The benefit-risk profile is well documented from the large late-stage clinical trial, and we believe in year three, approximately 100,000 individuals could be interpreted and eligible for this important treatment,” he said.

Naomi Kumagai, the senior equity analyst at Mitsubishi UFJ Morgan Stanley Securities, told via email that several factors were at play about Eisai’s share price.

She referenced a June 1 report from the Centers for Medicare and Medicaid Services outlining how people could access Leqembi once FDA approval had been granted and a positive outcome from an advisory committee on June 9.

Given the above, “we think all the positives are created into the share price. Thus the stakes are down today,” Kumagai stated.