STORY: Biogen said on Tuesday that its CEO Michel Vounatsos will step down and that the company is pulling back from selling its Alzheimer's drug Aduhelm after the U.S. government's Medicare program restricted coverage of the controversial treatment to patients in clinical trials.
Biogen said Vounatsos, who was named as the CEO in 2016, will continue in his role until a successor is appointed.
Aduhelm - the first new drug for Alzheimer's in nearly 20 years - was expected to be the company's next big blockbuster treatment.
But controversy over its approval without clear evidence that it slowed cognitive decline and the U.S. decision to severely limit access appears to have doomed its prospects.
The FDA approved the treatment last June over objections of the agency's panel of outside expert advisers.
Since then, legislators and federal agencies have launched investigations into that approval, and doctors and hospitals have held back on prescribing the drug.
Biogen said on Tuesday it was looking at "substantially" eliminating commercial infrastructure related to the drug and plans for more cost cuts, but will retain minimal resources to make it available to patients currently taking the treatment in the United States.
One analyst said the move will slow the company's cash burn and that the CEO transition will be received positively by the market, as many investors had been calling for it.
Biogen shares rose as much as 3.6% in Tuesday morning trading.