Biogen Inc (NASDAQ: BIIB) stock entered 2017 on a decent note generating over 2.9% (as of 11:03 AM EST January 5th, 2017; Source: Google finance). The consensus rating on the stock is a “Moderate Buy” with target price of ~ $ 339.14, representing an upside of over 15.5% (Source: tipranks.com)
Spin off of Bioverativ
Biogen Inc (NASDAQ: BIIB) has approved the tax-free-spin-off of Bioverativ. The spin-off will begin trading on February 2, 2017. Bioverativ would be a leader in discovering, developing and commercializing innovative therapies for hemophilia patients. The company has Eloctate and Alprolix drugs treating Hemophilia A and Hemophiia B respectively. Post spin-off, the company would retain commercial rights for these two drugs. These two drugs have earned combined sales of over $600 million in the first nine months of 2016. The spin-off ratio is expected to be 1:2 and the record date of the spin-off are January 17th. The spin-off will allow Biogen to focus on its core specialty of developing drugs for neurological indications.
Splendid quarterly performance
Biogen Inc reported 6.4% rise in revenues to $2,956 millions over the corresponding quarter. The company earned $2.96 billion during the quarter and reported EPS of $5.19 per share beating consensus estimates of $4.97 and corresponding quarter EPS of $4.48 per share. Biogen has a net margin of 34.03% and a return on equity of 40.02%
Product pipeline
Biogen and its partner Ionis Pharmaceuticals are planning to launch spinal muscular atropy (SMA) drug Spinraza in 2017. Spiral muscular atropy has no current treatment available and therefore the launch of this product would be a blockbuster. As per news media, the drug is expected to be priced ~$250,000 per year. Further, Spinrraza can treat all types of SMA whereas its competitor’s is targeting treatment of only patients with type 1. Further, Biogen would earn royalty income from Roche from the sale of its drug Ocrevus. The company has also planned early stage study evaluating BIIB074 in treating chronic facial pain disorder. Biogen has its late-stage candidate for treating Alzheimer’s disease. The US FDA recently granted fast-track designation for the drug.