7 Biogen Analysts On Alzheimer's Drug Success As Stock Skyrockets 37%

Zinger Key Points
  • Biogen is poised to transform into “an earnings growth story” from 2024, an analyst said.
  • There are many reasons to expect a modest launch of lecanemab, another analyst mentioned.
7 Biogen Analysts On Alzheimer's Drug Success As Stock Skyrockets 37%

Shares of Biogen Inc BIIB were flying on Wednesday, after the biopharma company said its experimental Alzheimer’s drug with Japanese partner Eisai showed promising results.

RBC Capital Markets On Biogen

Analyst Brian Abrahams maintained an Outperform rating, while raising the price target from $251 to $321.

“Much of BIIB's future direction had rested on the outcome of this ph.III study of lecanemab in Alzheimer's disease, and the data came through – with highly statistically significant results across the board, a higher-than-expected effect size reflecting clinical meaningfulness, and acceptable safety,” Abrahams said in a note.

"This supports "a high likelihood of full approval, CMS reimbursement, and $8B in out-year WW end-user sales," transforming Biogen into an earnings growth story from 2024, he added.

Piper Sandler On Biogen

Analyst Christopher Raymond reiterated a Neutral rating, while raising the price target from $200 to $280.

The drug should get full approval as early as the second quarter of 2023, Raymond said.

“That said, effect size of less than half a point on the 18 point CDR-SB scale is fairly consistent with what has been seen thus far with A-beta targeting therapies,” the analyst wrote. “Combining this with what we sense is a meaningful perception hole among neurologists, limited commercial infrastructure and looming competition from LLY and Roche, we think our modest lecanemab launch estimates are appropriate,” he added.

Raymond James On Biogen

Analyst Danielle Brill reaffirmed a Market Perform rating.
“The study was a clean win and close to our best-case scenario,” Brill wrote in a note.

“While full details of the study will not be presented until the CTAD conference on Nov 29th, the topline data appear supportive of full FDA approval and CMS coverage (without restrictions),” the analyst stated. “We think more clarity is needed on several variables before full value of the AD opportunity inflects in BIIB shares,” he added.

Check out other analyst stock ratings.

Morgan Stanley On Biogen

Analyst Matthew Harrison maintained an Overweight rating and a price target of $285.

“In addition to the positive data on the primary endpoint, mgt. indicated that all secondary endpoints were also statistically significant,” Harrison said.

“We see this as a clear win for Biogen with limited debate on the study outcome,” the analyst stated, while adding that the stock could “trade into the high-$200s or low $300s.”

Atlantic Equities On Biogen

Analyst Steve Chesney reiterated a Neutral rating and a price target of $200.

“While the result was statistically significant, we believe the reduction in clinical decline will not be deemed meaningful by treating physicians,” Chesney wrote in a note.

“We believe consensus estimates are unlikely to move materially higher without evidence of commercial traction following the expected early January approval,” he added.

Needham On Biogen

Analyst Ami Fadia reaffirmed a Buy rating and a price target of $250.

The Phase III results were “as good as one could have reasonably expected,” Fadia said.

“However, our view on lecanemab has been that the key question is on full CMS coverage, for which we believe traditional FDA approval does not automatically grant, and we don't believe the CLARITY AD results are a slam dunk to convince CMS to do so,” the analyst further stated.

BofA Securities On Biogen

Analyst Geoff Meacham maintained an Overweight rating and a price target of $225.

“Despite the positive outcome, we believe investors will continue to debate whether the effect size is enough to warrant a broad CMS reimbursement,” Meacham wrote in a note.

While there is “substantive” commercial opportunity in Alzheimer’s, the disappointing Aduhelm is a “stark reminder of the difficulties securing reimbursement and prescriber buy-in,” he mentioned.

BIIB Price Action: Shares of Biogen had risen by 37% to $271.75 at the time of publication Monday.

Posted In: Ami FadiaAtlantic EquitiesBofA SecuritiesBrian AbrahamsChristopher RaymondDanielle BrillGeoff MeachamMatthew HarrisonMorgan StanleyNeedhamPiper SandlerRaymond JamesRBC Capital MarketsSteve ChesneyAnalyst ColorPrice TargetReiterationAnalyst RatingsMoversTrading Ideas