Biogen Inc (NASDAQ: BIIB) stock has been upgraded to ‘overweight’ from ‘equalweight’ from Morgan Stanley Analyst Matthew Harrison. The analyst raised the price target heftily to US$375 from US$311. Also on Thursday morning, the broker said that data shows that earlier start with treatment with SPINRAZA may improve motor function outcomes in infants and children with spinal muscular atrophy. Morgan Stanley has that the group’s Alzheimer’s therapies are a “must-own” catalyst, and Biogen has several therapies in development. As a result, Biogen shares rose 4 percent shortly after Thursday’s market open while the bullish momentum on the stock seems to continue. Morgan Stanley has cited the potential of the company’s upcoming therapies and the strong pipeline.
Moreover, the analyst Matthew Harrison wrote that Aducanumab drug has established proof of concept and allows the analyst to value the program. The broker continues to see the R&D engine at Biogen as a strong long term driver of growth.
Biogen has multiple therapies to treat Alzheimer’s in its pipeline, that includes a lead candidate called Aducanumab which is currently undergoing a phase 3 trial, Harrison has commented in his upgrade note. The analyst Matthew Harrison said Aducanumab’s trial results will be released in late 2019 or early 2020, but an Alzheimer’s related catalyst could come sooner in a phase 1b follow-up at CTAD in November. In addition to Aducanumab, Biogen’s developing drug pipeline includes BACE inhibitor E2609, anti-amyloid antibody BAN2401, BIIB076 and the anti-tau therapy BIIB092.
Additionally, as per the analyst, Biogen’s SMA drug Spinraza realized the best launch of any orphan asset with $300 million in sales in just the first two quarters after launch. The therapy could realize peak sales of $4 billion and the therapy could boost the company’s topline growth rate by 3 to 4 percent. This would imply that BIIB will be a “mid-single digit percent grower” heading into the key catalyst of Alzheimer’s data releases.
Apart from the company’s therapies, Biogen’s “strong” balance sheet could fund additional M&A activity, the analyst concluded. These forms of business development could prove to be a way for management to “supercharge growth.”