Credit Suisse analyst Alethia Young posits, “To acquire or to be acquired, that is the question for Biogen Inc (NASDAQ:BIIB).” Until an answer is imminent, Young remains Neutral on BIIB and suggests a price target of $322. With interested buyers like Allergan and Merck circling around the biotech firm, Young projects an acquisition target range of $370 to $410 over shares.
Young explains, “We remain Neutral, since we are unsure if a deal will happen and our M&A scenario model doesn’t suggest significant upside from these levels.” Although Young notes that both Wall Street Journal and CNBC noted Allergan and Merck interest in taking on BIIB as a next merger.
The next question for Young as to BIIB valuation points to reasons for an acquirer to buy. From the analyst’s perspective, she highlights Biogen’s main assets as pipeline and clinical expertise over current operations, from a strong Alzheimer’s franchise (although lacking in Ph3 data for years), its Cambridge-based robust clinical infrastructure and expertise, a rising Spinal Muscular Atrophy Therapy platform, and a solid business base for multiple sclerosis.
For Biogen, Young surmises the operating model could benefit from removing significant expenses. The analyst comments, “Biogen’s MS sales force is more aligned by product, so we would guess some sales people could sell multiple products.” Whether Allergan looks to acquire Biogen for its science infrastructure or Merck decides to take the deal by cutting R&D, all of Young’s final thoughts on valuation will wait for the next and best bidder.
As usual, we recommend taking analyst notes with a grain of salt. According to TipRanks, which measures analysts’ and bloggers’ success rates based on how their calls perform, Alethia Young is a one-star ranked analyst, with a 54% success rate. Young loses 1.6% in her average returns.
TipRanks analytics demonstrate BIIB is a Buy. Based on 19 analysts who have offered recommendations on Biogen in the last 3 months, 53% rate a Buy while 47% maintain a Hold. The 12-month average price target is $334.69, marking a 4% upside from where the shares last closed.
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