Morgan Stanley On Biogen: Here's The 'Other' Coming Tysabri Catalyst

In a report published Tuesday, Morgan Stanley analyst Matthew Harrison maintained an Overweight rating on Biogen Inc BIIB, with a price target of $520, saying that the initial data on Tysabri in SPMS is positive. Biogen is conducting an 890 patient Phase III study of Tysabri in SPMS (secondary progress multiple sclerosis). Biogen management has indicated that the read-out would be in the back half of this year. Tysabri is being evaluated for SPMS and stroke. Analyst Matthew Harrison commented, "While most of consensus focuses on the patient baseline characteristics, we did find some of the initial open-label data of Tysabri in SPMS promising. In a 24 patient PhIIa of SPMS and PPMS patients, Tysabri demonstrated a sig. impact on inflammation and when those data were compared, albeit in a retrospective manner, to interferon β and placebo, Tysabri demonstrated a much greater impact in functional outcomes in SPMS patients." Harrison believes there is a "better than 50/50 odds of clinical success" and estimates an additional $1-2B in incremental sales upon approval. "Our call on BIIB revolves around our expectation of floor value in the stock driven by the base business plus BIIB037 in Alzheimer's with Tysabri, anti-LINGO and Neublast in each representing sig. upside catalysts over the next 6-12 months. Thus, with stable floor value we see positive risk-reward into each of these upcoming catalysts," Harrison added.