Biogen Inc. (NASDAQ:BIIB) stock is seeing muted sentiment Tuesday as it emerges from the euphoria over Aduhelm approval, with the most recent trigger being lukewarm data for a partnered program.

The Biogen Analyst: Geoff Meacham reiterated a Buy rating on Biogen shares and raised the price target from $400 to $415.

The Biogen Thesis: Biogen's partner Sage Therapeutics, Inc. (NASDAQ:SAGE) said the Phase 3 study of zuranolone for major depressive disorder met the primary endpoint but the treatment effect was modest, Meacham said in a Tuesday note.

Zuranolong, a GABAA modulator, reduced HAM-D scores by placebo adjusted –1.7, below the threshold delta of 3-4 points considered meaningful by BofA's key opinion leaders, the analyst said.

Additionally, the tolerability profile was mixed, with 15.3% somnolence versus 3% for placebo and 7.5% sedation vs. 0.4% placebo, he said. 

This could be a barrier for prescribers despite's zuranolone more rapid onset vs. standard-of-care, Meacham said. 

Key opinion leader feedback showed an unwillingness to trade one problem, such as depression, for another in the form of addiction, the analyst said.

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With efficacy being relatively modest and side effects increasingly a concern, there are likely to be uncertainties over the commercial picture that have given investors pause on the deal, he said.

Other hurdles include the lack of current commercial synergies, meaningful cost for medical outreach and likely restrictive payer management, Meacham said. 

"To be fair, these and other issues are ultimately solvable. But with the commercial teams focused on the complexities of Aduhelm's launch, how quickly is less clear." .

BofA increased its likelihood of success estimate for zuranolone from 35% to 65%, triggering the upward price target revision.

"The unexpected Aduhelm approval (our take) has altered the Biogen narrative; still given the extent of our questions on the timing and trajectory for growth upside, we remain cautious on shares at current levels," Meacham said. 

BIIB, SAGE Price Action: At last check, Biogen shares were trading down 0.64% to $403.53, while Sage shares were sliding 17.26% to $60.29.

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