Biogen shares soared as much as 64% to a record high on the news that the Cambridge, Massachusetts-based biotechnology company receives approval from the U.S. Food and Drug Administration for Alzheimer’s treatment ADUHELM (Aducanumab).
The U.S. Food and Drug Administration’s decision to approve this treatment will be the first in almost two decades. The food and drugs regulator press release did not talk about any major safety issues, which could help grant ADUHELM a clean label in the future.
Biogen shares surged as much as 64% on the news and finished the day up 38% at a new record high of $395.85 on Monday.
“We update our model for Aduhelm approval. We see the investor debate moving to launch speed (including how payers will respond), availability of infusion sites, and post-approval regulatory requirements. Given the limited competition and broad patient need, we expect a robust launch with limited access issues,” noted Matthew Harrison, equity analyst at Morgan Stanley.
“Price target to $455 on approval: We now reflect 100% of our expected revenues (versus 65% prior). We have slightly lowered our penetration as we assume more abandonment/payer pushback given the higher-than-expected price. The lower penetration is more than offset by increasing our assumed net price from $20,000 to $35,000 (the wholesale price is $56,000). We await further details from mgt. on their call tomorrow morning.”
Biogen Stock Price Forecast
Twenty-two analysts who offered stock ratings for Biogen in the last three months forecast the average price in 12 months of $359.06 with a high forecast of $458.00 and a low forecast of $244.00.
The average price target represents a -9.29% decrease from the last price of $395.85. Of those 22 analysts, 11 rated “Buy”, 11 rated “Hold” while none rated “Sell”, according to Tipranks.
Morgan Stanley raised the stock price forecast to $455 from $343 with a high of $694 under a bull scenario and $196 under the worst-case scenario. The firm gave an “Overweight” rating on the biotechnology company’s stock.
Several other analysts have also updated their stock outlook. Jefferies raised the target price to $500 from $450. Piper Sandler lifted the target price to $384 from $260. Oppenheimer upped the target price to $450 from $325.
“Today we are upgrading shares to Outperform, and increasing our price target from $225 to $450,” noted Phil Nadeau, equity analyst at Cowen.
“We assume penetration of the 1.5MM mild Alzheimer’s patients will grow to 8% by 2025, yielding $7B in revenue. Our 2025 Non-GAAP EPS estimate has increased from $21.40 to $37.05. We expect revenue to grow to $7B by 2025. We expect Aduhelm’s launch to drive a 13% revenue CAGR for Biogen for the period of 2021-25, among the highest in large-cap biotech.”
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