The European Medicines Agency's human medicines committee rejected the drug Leqembi, developed by Japan's ESAIY.US and Biogen(BIIB.US), for the treatment of Alzheimer's disease. This is a setback for companies seeking to expand sales in one of the world's largest pharmaceutical markets. According to a statement issued by the committee on Friday, the effect of the drug in delaying cognitive decline "cannot offset the risk of serious drug-related side effects".

The committee noted that patients treated with Leqembi often experience brain swelling and potential bleeding. ESAIY said in a statement that it was disappointed with the decision and would seek a reconsideration.

Leqembi is the first drug proven to slow down the progression of Alzheimer's disease, a disease that afflicts approximately 6 million Americans. Leqembi received full approval in the United States last year, but its popularity has been slowed down due to logistics obstacles. As the company's main drug for multiple sclerosis sales decline, Biogen has been seeking to boost the market by developing this product in partnership with Japan's ESAIY.

As of the time of publication, Biogen fell 5.48% in pre-market trading. Leqembi's commercial partner in the Nordic region, BioArctic, based in Stockholm, fell 31% in the European market, its biggest single-day drop since November 2020.

Eli Lilly and Co's Alzheimer's drug was approved in the United States this month, becoming the second drug to slow the progression of the disease. Biogen's drug has already been approved in several other countries, including Japan, China, and Israel.

Brian Abrahams, an analyst at Royal Bank of Canada Capital Markets, estimates that Europe accounts for about 20% of Leqembi's potential market. Even if the appeal overturns the decision, he said the launch in Europe would be delayed.

Abrahams said, "This could hinder global recognition and momentum for this drug and this category to some degree."