FDA Approves New Alzheimer’s Drug But Creators Biogen And Eisai Stock Slides

Key Takeaways

• Leqembi, the first ever drug for treating the cause of Alzheimers has been approved by the FDA
• Even so, the makers of the drug Biogen and Eisai have both fallen on the announcement
• It follows guidance from Medicare and Medicaid in early June on how to access the drug, plus positive commentary from an advisory committee, suggesting that the value of the approval was already built into the stock price

The pharmaceutical industry is often a cycle of booms and busts. Developing a new drug can take years, even decades and cost multiple millions of dollars. But even with massive R&D costs and many drugs never receiving approval, a big hit can make up for all of those costs and losses – and then some.

So when you hear the news that the FDA has approved the first ever drug that is used to slow the development of Alzheimers, you’d think it would be time for shareholders to break out the champagne, right?