(Reuters) - The $26,500-per-year price tag for Eisai Co (OTC:ESALY) Ltd and Biogen Inc (NASDAQ:BIIB)'s newly approved Alzheimer's disease drug is slightly above expectations, but should not dent demand for the promising therapy, Wall Street analysts said.
The U.S. health regulator on Friday granted accelerated approval to the drug, Leqembi, and the decision was hailed by patient groups.
The price set by the companies is higher than some analyst estimates of about $20,000.
"As a result of this higher than expected pricing, we think it is reasonable to see peak sales reach $15.2 billion worldwide," BMO analyst Evan Seigerman said in a research note.
However, the price tag is lower than that of Eisai and Biogen's first Alzheimer's disease drug, Aduhelm, which was initially priced at $56,000 annually before the drugmakers halved the price amid controversy over its approval.
"We think this level of pricing is unlikely to generate the intense scrutiny that followed the initial $56K Aduhelm price tag," said Baird analyst Brian Skorney in a research note.
"We don't expect this price to stunt demand for a product (Leqembi) that, in the best case scenario, could slow clinical decline by multiple years."
Still, initial patient access will be limited by several factors including reimbursement restrictions by Medicare, the U.S. government insurance program for Americans aged 65 and older who represent some 90% of individuals likely to be eligible for Leqembi.
Eisai and Biogen said on Saturday the Japanese drugmaker had applied for full approval by the U.S. Food and Drug Administration. Some analysts expect broader coverage by Medicare if the drug is granted full approval.