Reasons To Be Optimistic On Biogen's Alzheimer's Treatment Prospects

H.C. Wainwright said it is not surprised by Eli Lilly and Co LLY’s announcement of solanezumab failing to slow the cognitive decline in Alzheimer’s Disease patients. The news is also said to be a negative for Biogen Inc BIIB, which is testing its own Alzheimer's drug, aducanumab.

H.C. Wainwright Remains Optimistic

However, the brokerage reiterated its Buy rating on Biogen with $360 price target, as it remains optimistic on the prospects of aducanumab.

“In contrast to solanezumab, aducanumab has both clear evidence of target engagement and clear clearance of Abeta from the CNS, and is additionally differentiated by a different patient population, prodromal rather than mild AD patients,” analyst Andrew Fein wrote in a note.

Standing Apart

Biogen’s therapy acts by aiding clearance of the beta amyloid plaques from the brain, which is main cause for the disorder.

The Street too has noticed this difference between the two drugs as by Wednesday close alone, shares of Lilly was down by about 10.5 percent, while Biogen fell only about 3.5 percent amid the kneejerk hit on the Alzheimer’s space across the board.

Other brokerages too are positive on Biogen:

• Raymond James said it would be buyers of Biogen on weakness following Eli Lilly's failed EXPEDITION3 trial. The firm is of the view that this may be a clearing event with respect to any takeout.
• Morgan Stanley called a flat to a slightly up close for Biogen, as it is of the view that aducanumab is more potent than solanezumab. The firm said indication of activity/trends would keep amyloid debate alive.

Shares of Biogen closed Wednesday at $305.93.