RBC Capital analysts express strong confidence that Biogen's (NASDAQ:BIIB) Alzheimer's drug Leqembi will receive a positive recommendation from the Committee for Medicinal Products for Human Use (CHMP) in Europe.
Following an oral explanation on June 25, RBC believes the elapsed time without any negative disclosure from Biogen or its partner Eisai indicates a favorable trend vote.
"Given that it has now been well more than 8 days since the oral explanation was held, we believe it is increasingly likely that the vote trended positively and that Leqembi will be recommended for approval in Europe," RBC Capital notes.
The analysts expect the CHMP recommendation to be issued on July 26, aligning with the European Medicines Agency's monthly meeting.
They explain that historical patterns suggest drugmakers usually disclose negative trend votes shortly after meetings. Biogen and Eisai had previously disclosed a negative trend vote for Aduhelm within eight days. The absence of such a disclosure for Leqembi further bolsters RBC's optimism.
RBC already assigns a 90% probability of Leqembi's approval in Europe, which is anticipated to follow approximately two months after the CHMP's recommendation.
Although the European market is less significant for Leqembi's revenue compared to the U.S.—$2 billion peak versus $5.4 billion—RBC emphasizes the broader implications of global acceptance.
"Establishment of beta-amyloid drugs as standards of care globally, rather than only in certain markets, if anything should help improve awareness and acceptance," RBC states.
The analysts also highlight that the infrastructure for testing, monitoring, and administering Leqembi remains a critical factor for its uptake, but the expected approval should mitigate near-term risks.
"Enough time has now elapsed since the oral explanation to give us high confidence Leqembi will be approved in Europe, reducing near-term risk and helping improve global acceptance and awareness of the drug," RBC concludes, stating they would remain buyers of Biogen.