Wall Street Mixed On Biogen Before Earnings: Analysts Differ Regarding Expected Growth Rates

Shares of Biogen Inc BIIB fell 1.71 percent on Thursday trading, ahead of the announcement of the company’s second quarter financial results, scheduled for before the market opens on Friday. According to Estimize, the Street is expecting to see 17 percent year-over-year growth in earnings, to $4.10 per share, on revenue of $2.711 billion. Let’s take a look at what some major Wall Street research firms are saying about the biopharmaceutical company before the report.

Deutsche Bank

Analysts at Deutsche Bank are modeling below-consensus earnings of $4.04 per share. The firm maintains a Buy rating and $460.00 price target on the stock.

Related Link: Deutsche Bank Bullish On Biogen: New Data Doesn't Change Probability Of Success For Alzheimer's

In a report published Wednesday, analysts Robyn Karnauskas, Mohit Bansal and Evan Seigerman assure that,following the results for its Phase 1 Alzheimer's study, in which a 6mg Aducanumab dose failed to significantly slow mental deterioration, they don’t see any major changes to the probability of the Alzheimer's Program. In fact, the company told the firm that “data are directionally in right direction and [thus] they continue to go ahead with their phase 3 plans.”

Piper Jaffray

Piper Jaffray is more bullish, and models earnings of $4.11 per share for the second quarter, on sales of $2.745 billion. However, going forward, the firm is not as constructive, and recently trimmed its rating from Overweight to Neutral, setting a price target of $410.00.

The analysts believe the data for the 6mg Aducanumab dose is sloppy, and “do not believe this is an attractive pipeline program. With deteriorating expectations for both the base business and the pipeline, we believe BIIB has to make an aggressive acquisition to restore investors' confidence in its long-term growth prospects,” they explain. But, unlike Celgene Corporation CELG and Alexion Pharmaceuticals, Inc. ALXN, who made bold purchases from places of strength, the experts believe “investors will view a large deal by BIIB as coming from a place of weakness.”

Evercore ISI

Evercore ISI’s Rich Ross, for his part, thinks the company’s big uptrend remains intact despite the recent weakness in the stock, and would buy the dip. On Friday’s call, the firm will be looking for commentary on BIIB037 following this week's AAIC presentation and observations on Tysabri in stroke and SPMS.

For the second quarter, the analysts expect to see earnings of $4.07 per share on revenue of $2.724 billion. In an email to clients, they note that “Fx rates have been fairly stable over the 2Q, and US Tecfidera script trends have not changed either (still looks pretty flattish). That said, IMS data implies US Tecfidera sales to come in at or above consensus of ~$725MM for 2Q. And if we assume flattish scripts for the remainder of the year, we get to 2015 US consensus of ~$3.0Bn.”

Leerink

Unlike some of its peers, Leerink reiterated an Outperform rating on Biogen after the release of the 6mg Aducanumab results. The analysts think an explanation for the reduced effect size and lack of statistical significance lies in the improved absolute pbo response.

Next up, the firm will be “paying close attention to the Ph.2 800-pts data from Eisai/BIIB partnered a-beta protofibril-targeted drug BAN-2401 expected to be released before Eisai's fiscal year end in March 2016.”

Baird

Finally, Baird analysts are modeling earnings of $4.13 per share, three cents above consensus. The experts say they feel “incrementally positive on Aducanumab presentation at AAIC.” While most of the data in Wednesday’s oral presentation had been already provided in a premarket PR event, the firm sees “the slide showing a correlation between the targeted biomarker and clinical effect as a meaningful update from the press release and the most supportive evidence of a drug effect on clinical outcome.”