Biogen's Pivot to Leqembi and Donanemab: Navigating Alzheimer's Therapeutics in an Era of Stringent Evidence Demands

The Alzheimer's drug development landscape is undergoing a seismic shift. Biogen's abrupt discontinuation of Aduhelm in January 2024—just three years after its controversial accelerated FDA approval—has crystallized a pivotal truth: the era of therapies with equivocal clinical benefits is ending. Investors must now focus on companies with late-stage pipelines anchored in robust efficacy data, such as Biogen's Leqembi and Lilly's donanemab. These drugs exemplify the industry's pivot toward therapies that meet Medicare's stringent coverage criteria and deliver measurable clinical outcomes.

The Aduhelm Debacle and Its Strategic Fallout

Biogen's decision to abandon Aduhelm was not a failure of science but a pragmatic reallocation of resources. Aduhelm's accelerated approval in 2021, based on biomarker data rather than clear cognitive benefits, backfired. Medicare's restricted coverage—limiting access to clinical trials—coupled with mixed Phase 3 results (only one trial showed statistically significant amyloid reduction) left the drug with negligible commercial traction. By 2024, Biogen had recorded a $60 million charge to close out the program, redirecting its focus to therapies with proven clinical value.

The strategic retreat highlights two critical trends:
1. Regulatory and Reimbursement Stringency: Medicare's National Coverage Determination now demands “high-level evidence” (e.g., slowing cognitive decline) for Alzheimer's therapies. Aduhelm's reliance on biomarkers alone was insufficient.
2. Investor Preference for Late-Stage, Evidence-Backed Assets: Biogen's stock (BIIB) surged 18% in 2024 after announcing its pivot to Leqembi and tau-targeting candidates, signaling market confidence in its refocused pipeline.

Leqembi: The Benchmark for Efficacy and Accessibility

Leqembi (lecanemab), co-developed with Eisai, stands as Biogen's crown jewel. Approved in July 2023, it became the first anti-amyloid therapy to demonstrate statistically significant cognitive benefits in a Phase 3 trial. In the Clarity AD study, Leqembi slowed clinical decline by 27% over 18 months, with a 35% reduction in tau accumulation—a critical biomarker of disease progression. Its biweekly dosing regimen and FDA's full approval (not provisional) have positioned it as the standard of care.

The drug's commercial success is underpinned by Medicare's broader coverage: as of Q2 2025, it is reimbursed for patients with mild cognitive impairment or early dementia confirmed by amyloid PET scans. Analysts project Leqembi's global sales to exceed $2.5 billion in 2025, a stark contrast to Aduhelm's negligible revenue.

Lilly's Donanemab: A Latecomer with Superior Efficacy

Lilly's donanemab (Kisunla), approved in July 2024, has emerged as a formidable competitor. Its Phase 3 trial demonstrated a 35% slowing of cognitive decline—outperforming Leqembi's 27%—and achieved amyloid clearance in 71% of patients. A head-to-head trial (TRAILBLAZER-ALZ 4) further cemented its superiority over Aduhelm, with 38% of patients achieving plaque clearance versus 2% for Aducanumab.

Donanemab's monthly dosing and potential for treatment cessation once plaques are cleared offer cost advantages. Medicare coverage decisions, expected by late 2025, could propel its market share. Analysts estimate peak sales of $4 billion, assuming broad access.

The Tau Frontier: Biogen's Next Big Bet

Biogen's pipeline now prioritizes therapies targeting tau, a protein linked to neuronal degeneration. Its antisense oligonucleotide BIIB080 and tau aggregation inhibitor BIIB113 are in Phase 2 trials, with early data showing reductions in tau biomarkers. These assets reflect a strategic shift toward addressing Alzheimer's multifactorial pathology—a necessity given that amyloid-only therapies like Leqembi delay, but do not halt, cognitive decline.

Risks and Considerations for Investors

1. Coverage Uncertainty: Medicare's final coverage decisions for donanemab and Leqembi remain critical. A narrow eligibility criteria (e.g., requiring biomarker testing) could limit adoption.
2. Competitive Landscape: Biogen and Lilly now face emerging threats. Longeveron's Lomecel-B (RMAT-designated cellular therapy) and AC Immune's anti-tau JNJ-2056 threaten to diversify treatment options.
3. Cost Pressures: At $26,000–$30,000 annually, these therapies may face resistance in cost-sensitive markets unless pricing models evolve.

Investment Thesis: Prioritize Data-Driven Pipelines

Investors should allocate capital to companies with late-stage assets that meet Medicare's evidence bar:
- Biogen: Its Leqembi dominance and tau pipeline provide a dual lever for growth. The stock's valuation (P/E ~18x) remains attractive given its 15% annual revenue growth outlook.
- Lilly: Donanemab's superior efficacy and cost advantages position it as a high-growth play, especially if Medicare coverage is granted.

Avoid speculative bets on early-stage programs or therapies lacking Phase 3 clinical data. The industry's shift toward rigorous evidence demands a disciplined focus on proven assets.

Conclusion

Biogen's strategic pivot underscores a paradigm shift: the Alzheimer's market now rewards therapies that deliver tangible cognitive benefits, not just biomarker improvements. Investors who align with companies like Biogen and Lilly—backed by late-stage, data-driven pipelines—will be best positioned to capitalize on this evolution. The era of “good enough” science is over; the winners will be those who deliver therapies that matter.