Market Overview

Citi Surprised, Confused Amid Report Biogen May Divest Hemophilia Unit

Share:

Reuters reported on Friday that Biogen Inc (NASDAQ: BIIB) is exploring the sale of its hemophilia business. Citi’s Robyn Karnauskas maintained a Buy rating for the company, with a price target of $345, saying that the news is both “surprising and confusing,” since previously the company had indicated it would use cash for M&A.

Analyst Robyn Karnauskas mentioned that the news comes as a surprise, since the franchise is growing and peers in the sector “are looking to diversify.” He added that Biogen is facing significant uncertainty in 2016, “ahead of several binary events,” and the sale of the hemophilia unit would increase the company’s leverage to the MS marketplace.

Possible Scenarios After Sale Of Hemophilia Unit

“While we do not know if such a sale will take place, we see the FV of the Hemophilia Biz at $4.8-$6.4B on NPV basis,” Karnauskas wrote. He enumerated three possible scenarios following a divestiture of the unit as:

  1. Cash used to acquire a bigger strategic asset
  2. Cash used for buybacks
  3. Attempts to make the company leaner and more attractive as a potential M&A target.

The analyst pointed out, however, that the acquisition of Biogen would be challenging due to the uncertainty related to the “Forward Pharma patent issue regarding Tecfidera.”

Latest Ratings for BIIB

DateFirmActionFromTo
Feb 2021Cantor FitzgeraldMaintainsNeutral
Feb 2021Credit SuisseMaintainsOutperform
Feb 2021Morgan StanleyMaintainsOverweight

View More Analyst Ratings for BIIB
View the Latest Analyst Ratings

 

Related Articles (BIIB)

View Comments and Join the Discussion!

Posted-In: Citi Robyn KarnauskasAnalyst Color Long Ideas Reiteration Analyst Ratings Trading Ideas

Latest Ratings

StockFirmActionPT
GNKJefferiesMaintains13.0
TDOCDA DavidsonMaintains275.0
ITRIOppenheimerMaintains127.0
CLHOppenheimerMaintains95.0
TDOCOppenheimerMaintains270.0
View the Latest Analytics Ratings
Don't Miss Any Updates!
News Directly in Your Inbox
Subscribe to:
Benzinga Premarket Activity
Get pre-market outlook, mid-day update and after-market roundup emails in your inbox.
Market in 5 Minutes
Everything you need to know about the market - quick & easy.
Fintech Focus
A daily collection of all things fintech, interesting developments and market updates.
SPAC
Everything you need to know about the latest SPAC news.
Thank You

Thank you for subscribing! If you have any questions feel free to call us at 1-877-440-ZING or email us at vipaccounts@benzinga.com