Mind you that the $26.6 million that the company has already contracted for 2023 is about the same as what Cogstate did last year. Between now and mid-2023, I expect that value to go much higher.

BIOGEN AND CAMBRIDGE COGNITION

Just recently CMS – the organization running Medicare, the US public healthcare program – issued a statement saying that not every patient with AD was eligible for reimbursement of Aduhelm – just the patients enrolled in a phase 4 trial.

You see, the FDA (the regulator) approved the commercialization of Aduhelm last year on the basis that it helped clear the Beta-Amyloid plaque in the brain.

That plaque is thought to be in the origin of the Alzheimer’s Disease, but there is no relevant scientific evidence yet; it’s just an hypothesis.

CMS is not certain of that cause-effect relationship hence the demand for further clinical trials before approving the reimbursement. This was a blow to Biogen and will probably be the commercial end of Aduhelm as it will massively reduce the number of people taking the drug.

The thing is, Biogen had priced Aduhelm at $56 thousand dollars per year. That would raise the total Medicare budget from $37B to $69 billion per year. To access the reimbursement by CMS, Biogen later lowered the price to $28 thousand, but that was still too much for CMS.

I’m not sure if this story will hinder Cogstate’s future as other drugs are already in development and the companies developing them should be learning something from this example, but I’ll be asking the management what’s their view on it.

Also, it looks like Cambridge Cognition is partnering with Biogen. I’m trying to find the link to Biogen’s website where you can take a Cambridge Cognition test, but I can’t find it. 

Cambridge is likely behind the new study done by Biogen and Apple with the iWatch, so it will probably be landing the phase IV trial for Aduhelm too.

CHINA and COGMATE  

Back in December 2020, a new chinese drug for the treatment of AD was approved for reimbursement in China. Also, in January Eisai announced the launch of Cogmate in Hong Kong and Taiwan, which is a major milestone. 

It looks like the company is testing the waters to get into mainland China. It would be interesting to see Cogmate being launched in China prior to the USA. 

CONCLUSION

It appears that nothing material has changed regarding the investment thesis on Cogstate. Yes, there’s always a chance that someone knows more than us, but that’s just how the game goes. There’s nothing we can do about it.

Apart from that, the ups and downs of the share price are just the price of admission to making money in the stock market.

As a fellow investor likes to say “Watch the business, not the stock.” – Ian Cassel

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