Lecanemab Injection Approved in China: Seizing Investment Opportunities in the Alzheimer's Disease Therapeutic Landscape

Market Review

Last week (January 8, 2024 - January 12, 2024), the A-share Shenwan Pharmaceutical and Biotechnology sector dropped by 2.7%. The sector underperformed the CSI 300 Index by 1.35 percentage points and lagged behind the ChiNext Composite Index by 1.27 percentage points. Among the 31 primary sub-sectors of Shenwan, the pharmaceutical sector ranked 24th in terms of weekly gains and losses. The Hang Seng Healthcare Index fell by 0.4%, outperforming the Hang Seng Index by 1.36 percentage points. Among the 12 primary sub-sectors of Hang Seng, the healthcare industry ranked 1st in terms of weekly gains and losses.

Core Viewpoint

Lecanemab Injection Approved in China, Bringing New Hope for Alzheimer's Treatment. According to Economic Observer, on January 9, the National Medical Products Administration announced the approval of lecanemab injection (brand name: Leqembi) for Alzheimer’s disease (AD) in China. The indication is for treating mild cognitive impairment caused by Alzheimer's disease and mild dementia due to Alzheimer's disease. Eisai leads the global development and regulatory submission of lecanemab, while the product is jointly commercialized and promoted by Eisai and Biogen, with Eisai having the final decision-making authority. This monoclonal antibody received full approval in the U.S. in July 2023 and was approved in Japan in September 2023. China is the third country to approve the marketing of lecanemab. The approval of lecanemab in China is based on the global large-scale Phase III study Clarity AD, which included China. In the Clarity AD study, results from nearly 2,000 patients with early Alzheimer's disease showed that lecanemab met the primary endpoint and all key secondary endpoints, with statistically significant outcomes. The results of the Clarity AD study were presented at the 2022 Clinical Trials on Alzheimer's Disease conference and published in the top medical journal, The New England Journal of Medicine. According to the Eisai China official website, lecanemab can selectively bind to soluble Aβ polymers (protofibrils) as well as insoluble Aβ polymers (fibrils), the main component of Aβ plaques, thereby clearing Aβ protofibrils and Aβ plaques in the brain. This product is the first and currently the only fully approved therapy that can slow disease progression and reduce the rate of cognitive and functional decline through this mechanism of action.

The Alzheimer's disease (AD) diagnosis and treatment market is vast. According to Eisai China’s official website, as the world's first breakthrough targeted drug addressing the root cause of AD, the approval of Lecanemab will lead AD treatment into a new era, providing better treatment options for Chinese AD patients. According to The Economic Information Daily, on the evening of January 10th, information from Eisai China showed that the expected price for Leqibao (Lecanemab Injection) after its market launch would be 2,508 yuan per vial, with a specification of 200 mg (2 ml). This price is about one-quarter lower than the current price in the Hainan Boao pilot zone. Based on these calculations, a patient weighing 60 kg would require a dosage of 600 mg, approximately three vials of the drug, costing around 7,500 yuan for a single use, with monthly treatment costs being about 15,000 yuan and annual treatment costs approximately 180,000 yuan. Considering China’s large base of Alzheimer's patients, according to data cited by China Securities Journal from "China Alzheimer's Disease Report 2021," there were 13.24 million existing cases of AD and other forms of dementia in China in 2019, indicating a broad market for the diagnosis and treatment of this condition.

Investment Advice

We believe that there is a significant unmet clinical need in AD, with a broad market for treatment, diagnosis, and other areas. With the approval of lecanemab, Alzheimer's disease treatment is expected to usher in new hope. We recommend paying attention to companies in China with relevant pipeline layouts, such as Simcere Pharmaceutical, Hengrui Medicine, Hisun Pharmaceutical, and Tonghua Jinma.

Risk Warning

Risk of sales falling short of expectations, uncertain risks due to pharmaceutical policies, and the risk of intensified market competition.