Why This Analyst Is Cautious On Biogen

• Biogen Inc BIIB are down 12 percent since January 4, and trading close to their 52-week low.
• Credit Suisse’s Alethia Young initiated coverage of the company with a Neutral rating and a price target of $322.
• More clarity is required on the company’s pipeline and base business growth rate before considering an investment in the stock, Young stated.

Analyst Alethia Young mentioned that Biogen’s shares were fairly volatile in 2015, largely driven by the pipeline results for LINGO and Alzheimer’s, slowing Tecfidera sales, concerns over generics and pricing in multiple sclerosis, and competition in the hemophilia franchise.

“Slowing base business combined with risky but potentially game-changing pipeline has led to multiple contraction of Biogen shares,” Young noted.

The analyst pointed out that Biogen’s base businesses continue to have headwinds and that the long-term business growth could be hit by competition from new regimes.
Potential catalysts that could boost Biogen’s future performance include:

1. Synergy MS study and anti-LINGO1 data in mid-2016
2. BAN2401 top-line data in AD
3. E2609 BACE safety look
4. Solanezumab Phase 3 data in October 2016
5. Adacanumab titration updates on the PRIME AD study.

Young said that Biogen’s long-term growth is risky, since it is “heavily weighted towards pipeline that we deem risky.” The company’s near-term pipeline opportunities include Ocrelizumab for MS and nusinersen for spinal muscular atrophy.