Biogen Shares Crater After CMS Limits Coverage For Alzheimer’s Drug

We bet Biogen didn’t see this coming.

After Biogen delivered its mea culpa about charging too much for its controversial Alzheimer’s drug Aduhelm during JPM’s health-care press conference yesterday (while trying to win back Wall Street’s favor), CMS released a draft coverage decision after the market close on Tuesday that it would only cover the anti-amyloid Alzheimer’s drug for patients in medical trials – effectively cutting Biogen off from what the company had hoped would be its biggest source of revenue.

The news caused Biogen shares to crater in after-hours trade, as shares sunk 7%.

And the carnage wasn’t confined to Biogen: Eli Lilly shares dumped nearly 4% on the news.

The decision comes a day after Department of Health and Human Services Secretary Xavier Beccerra ordered that the government “reassess” a historic price in Medicare Part B premiums thanks to the company’s decision to cut the price.

But apparently, the federal government isn’t impressed with the blockbuster drug, which is just one in a suite of new drugs being developed by Biogen that target Alzheimer’s and other brain disorders. CMS is holding a press conference to share more information about the decision.