Shares of Japan’s Eisai Co. experienced an 11% drop on Monday, heading toward their largest single-day decline in three years, after the European Union’s regulatory body rejected the approval of the company’s Leqembi treatment for early Alzheimer’s disease.
The European Medicines Agency (EMA) concluded last week that the risks associated with Leqembi, particularly the potential for severe brain swelling, outweighed the drug’s modest benefits in slowing cognitive decline.
Eisai, in collaboration with Biogen, has announced plans to request a re-evaluation of the EMA’s decision but has not yet specified the additional information it intends to submit.
Jefferies analyst Stephen Barker described the rejection as a significant negative surprise, given that European approval was widely anticipated. Barker noted that the decision could damage Leqembi’s reputation in the U.S. and Japan, potentially impacting sales in those regions as well.
Barker further suggested that the removal of European sales projections for Leqembi could lead to a reduction of overall sales estimates by approximately 20% and a decrease in Eisai’s share value by around 1,000 yen each.
In early Tokyo trading, Eisai’s shares fell to 5,890 yen, marking their largest single-day fall since July 2021. This decline followed a 7% drop in Biogen’s shares during U.S. trading on Friday.
Leqembi, also known as lecanemab, remains approved in the U.S., China, Hong Kong, Israel, Japan, and South Korea. The drug was poised to be Europe’s first treatment targeting the underlying causes of Alzheimer’s disease rather than just alleviating its symptoms.
