Shares of Japan’s Eisai fell 11% on Monday, marking their largest one-day drop in three years. This decline followed the European Union’s regulator rejecting Eisai’s Leqembi treatment for early Alzheimer’s disease, citing the risk of serious brain swelling outweighing its minimal impact on slowing cognitive decline.
Eisai and its partner Biogen announced plans to seek a re-examination of the decision but did not specify the new information they would provide to the regulator. Jefferies analyst Stephen Barker noted that the EU approval had been widely anticipated, making this rejection a significant negative surprise. He warned that the EU’s decision might damage Leqembi’s reputation in the U.S. and Japan, potentially impacting sales in those markets.
Barker estimated that excluding European Leqembi sales could reduce overall sales estimates by around 20% and decrease Eisai’s share value by about 1,000 yen each. Eisai’s shares fell to 5,890 yen, their lowest since July 2021. Biogen’s shares also dropped 7% in U.S. trading on Friday.
Leqembi, known as lecanemab, is approved in the U.S., China, Hong Kong, Israel, Japan, and South Korea. It would have been Europe’s first drug to treat Alzheimer’s disease rather than just its symptoms.