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Could Roche Put a Crinkle in Biogen's Alzheimer's Drug Launch?

Roche (OTC: RHHBY) is considering a launch of its Alzheimer's disease drug, gantenerumab, at a price that could undercut competition from Biogen's (NASDAQ: BIIB) Aduhelm. In this Motley Fool Live video recorded on Nov. 15, Motley Fool contributors Keith Speights and Brian Orelli discuss reasons why Biogen investors should be concerned if Roche's drug gains FDA approval. Roche has previously priced drugs at a sharp discount to hurt sales for Biogen and also hopes to show "unequivocal data on efficacy" for gantenerumab, in stark contrast to the controversy over Aduhelm's efficacy.

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Brian Orelli: Executives at Roche told Reuters that the company could launch their Alzheimer's disease drug that will compete with Biogen's Aduhelm at a substantial discount. Is this something that Biogen investors should be worried about? Obviously, Roche has to get its drug approved by the FDA first.

Keith Speights: My initial take on this, Brian, is yeah, Biogen investors should be worried. They should be apprehensive about this. As you said, Roche obviously has to win FDA approval first, but let's assume that it does. If Roche wins FDA approval, I think Biogen sales of Aduhelm could very well take a big hit.

Roche has used price as a weapon for a new drug in the past, and in a way that hurt Biogen. For example, it priced the multiple sclerosis drug Ocrevus at a 30% discount to the standard of care, and that hurt Biogen. Biogen, by the way, had initially developed the drug and licensed it to Roche. But Roche's head of pharmaceuticals, Bill Anderson, said that the company hopes to show -- I'm going to quote here -- "unequivocal data on efficacy". If the company does that and has this lower price, I think Biogen could be in trouble here. To be competitive, Biogen's probably going to have to slash its price for Aduhelm, and that's something it absolutely doesn't want to have to do. Now, I've used a lot of "if"s. We need to see the phase 3 data from Roche's Alzheimer's disease drug. But I think this could make an interesting drama even more intriguing, if Roche comes out with some really good, solid phase 3 results.

Brian Orelli, PhD and Keith Speights have no position in any of the stocks mentioned. The Motley Fool recommends Biogen. The Motley Fool has a disclosure policy.


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