Biotech Is Back With Guggenheim Upgrade: What You Need To Know

Zinger Key Points
  • Guggenheim Partners analyst upgrades Biogen to a Buy from a Neutral rating with a $350 price target.
  • Guggenheim notes the company is expecting to meet revenue goals for 2023 and planning to cut costs.

Guggenheim Partners upgraded shares of Biogen Inc BIIB to Buy, citing the company's potential for growth driven by its Alzheimer's disease (AD) and major depressive disorder (MDD) operations.

The BIIB Analyst: Yatin Suneja upgraded Biogen to a Buy from a Neutral rating, with a $350 price target. Shares are currently trading around $310 Monday at publication.

Guggenheim’s new investment thesis focuses on key drivers of growth including the full approval and broad CMS coverage of Leqembi, a subQ formulation, and potential revenue-generating products in rare disease, immunology, and psychiatry space.

Suneja noted the company planned to prioritize the development of BIIB080 and allocate more resources to the program. It has also exercised the option to license Denali's Antibody Transport Vehicle (ATV) Amyloid beta program, with the goal to increase anti-Aβ antibodies CNS exposure to improve the efficacy and/or safety of anti-Aβ therapeutics.

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Despite potential competition at launch, the analyst said Zuranolone represents a large commercial opportunity in the long run, with its NDA seeking approval for the treatment of MDD and PPD (post-partum depression) being accepted for priority review.

Biogen also plans to broaden its therapeutic focus beyond neurology and make business development a key part of its strategy.

Qalsody (tofersen) was approved to treat patients with amyotrophic lateral sclerosis (ALS) associated with a mutation in the superoxide dismutase 1 (SOD1) gene (SOD1-ALS). This represented an additional upside, as its relevance of approval offers Biogen the opportunity to build a leadership position in the rare disease space.

Despite reporting earnings in late April that beat consensus estimates on the top and bottom lines, the company's EPS and revenue were lower on a quarter-over-quarter and year-over-year basis.

Guggenheim noted the company was still expecting to meet revenue goals for 2023 and planned to cut costs to prepare for future business opportunities.

BIIB Price Action: Shares of Biogen are trading 2.04% higher to $310.44, according to Benzinga Pro.

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Posted In: Analyst ColorBiotechMid CapNewsUpgradesTop StoriesAnalyst RatingsTrading IdeasGeneralExpert IdeasGuggenheim PartnersYatin Suneja
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