Home Market News These companies set to benefit from sales of Biogen Alzheimer's med Leqembi

These companies set to benefit from sales of Biogen Alzheimer's med Leqembi

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These companies set to benefit from sales of Biogen Alzheimer's med Leqembi
Radiologist in the control room performing an MRI scan

andresr/E+ via Getty Images

Following the US FDA’s full approval of Biogen (NASDAQ:BIIB) and Eisai’s (OTCPK:ESAIY) Leqembi (lecanemab) for Alzheimer’s disease, the two companies have experienced a significant boost. With approval comes coverage from the Centers for Medicare and Medicaid Services (CMS), which means that the drug will be covered by Medicare.

Medicare coverage means that patients will have most of the cost of the drug, priced at $16.5K, covered by the government. Additionally, other companies in the diagnostics and imaging industry have the opportunity to profit from the increased use of Leqembi.

While full approval could help restore Biogen (BIIB) and Eisai’s (OTCPK:ESALF) tarnished reputation following the lack of success with their previously approved Alzheimer’s medication Aduhelm (aducanumab), the process of convincing patients to take the drug is not without challenges.

To be eligible for treatment, patients must have a confirmed diagnosis of mild cognitive impairment related to Alzheimer’s or mild dementia. Those with more severe forms of the disease do not qualify.

Furthermore, patients must undergo an amyloid PET scan or spinal tap to confirm the presence of amyloid, a protein associated with Alzheimer’s. However, Medicare only covers one PET scan per lifetime, and only as part of a clinical trial. The out-of-pocket costs for a PET scan can exceed $3,000, according to the Alzheimer’s Association.

Although these issues surrounding imaging costs may be resolved if CMS eliminates the restriction on PET scans, patients undergoing Leqembi treatment will still require regular MRI scans due to potential brain hemorrhaging and bleeding observed during clinical trials.

While these obstacles may discourage some individuals, they present opportunities for other companies in the diagnostics and imaging sector. Companies that provide necessary systems for PET and MRI scans, as well as radiology centers where the scans are conducted, are likely to benefit.

Companies Set to Benefit from Leqembi

  • GE HealthCare Technologies (NASDAQ:GEHC) is a prominent healthcare equipment company, with a significant focus on diagnostic machines and supplies. Their Omni Legend and Discovery CT/PET machines are already prevalent in radiology suites. If demand for Leqembi intensifies, orders for these machines are expected to increase.
  • Siemens Healthineers (OTCPK:SEMHF)(OTCPK:SMMNY) is another major player in the diagnostics and imaging industry. Their Biograph family of CT/PET scanners competes directly with GE HealthCare (GEHC).
  • Roche’s (OTCQX:RHHBY) diagnostics segment offers a test that can detect the presence of amyloid from cerebrospinal fluid (CSF). Since a spinal tap can also be used to detect amyloid, this diagnostic test is relevant for Leqembi.
  • RadNet (NASDAQ:RDNT) is a leading provider of diagnostic imaging services across the United States, operating 357 centers in seven states. This is where patients can undergo amyloid PET scans or regular MRI scans required for Leqembi treatment.
  • Diagnostic service providers Quest Diagnostics (DGX) and Laboratory Corporation of America (LH) may also experience increased testing due to the use of Leqembi. Labeling recommends testing potential patients for the APOE4 gene, which is associated with a higher risk of the brain hemorrhaging and bleeding observed with the drug.