J. P. Morgan Analyst Sees Reason to Cheer Biogen Inc (BIIB) Following Early Approval of Drug Spinraza in SMA


J.P. Morgan analyst Cory Kasimov is out singing the praises of Biogen Inc (NASDAQ:BIIB) believing the FDA just granted the biotech firm the best holiday gift of the season. The firm’s pipeline drug Spinraza designed to treat spinal muscular atrophy (SMA) has been granted early, broad label approval from the agency in both pediatric and adult indications. Notably, the approval comes with no surprising safety mentions or warnings.

Though Kasimov is not surprised, he sees plenty of reason to celebrate, and as such, he reiterates an Overweight rating on BIIB with a target price of $384 that represents an upside of 20% from where shares last closed.

Kasimov spots significant growth potential, asserting, “FDA’s rapid approval and broad label underscore the unmet need in SMA; we anticipate rapid uptake though logistical issues could be a bottle neck. Spinraza is the only treatment approved for SMA, and given the uniformly fatal nature of early onset disease, we expect significant demand for treatment.”

Additionally, the analyst shares key takeaways from a recent discussion with a KOL to discuss Spinraza’s profile and pathway. Kasimov is increasingly bullish on the heels of this conversation, as not only does the KOL also anticipate broad usage for the drug, he intends to recommend this as treatment for 100% of his patients.

Shipping for the now-approved drug will begin this week as preparations in the field have already begun with sales representatives educating doctors and infusion centers.

Kasimov concludes, “Until recently, we felt Spinraza had been relatively underappreciated by investors, but approval/launch will likely be important drivers for BIIB shares in 2017. Given the substantial unmet need in SMA and high profile nature of this development pathway, we expect fairly rapid uptake upon launch and for Spinraza to be a meaningful source of growth for BIIB in the near-to-intermediate term.”

As usual, we recommend taking analyst notes with a grain of salt. According to TipRanks.com, Cory Kasimov has an average return loss of 12.9% and a success rate of 30%. When recommending BIIB, Kasimov has an average loss on the stock of 16.0%.

TipRanks analytics demonstrate BIIB as a Buy. Out of 13 analysts polled by TipRanks in the last 3 months, 7 rate a Buy on BIIB stock while 6 maintain a Hold. With a return potential of 16%, the stock’s consensus target price stands at $335.92.  

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