Let’s Hear It for Biogen Inc (BIIB) Drug Spinraza’s Blockbuster Potential, Raves Cowen Top Analyst


Coming off its successful launch of Spinraza, the first drug approved to treat children and adults with spinal muscular atrophy (SMA), Biogen Inc (NASDAQ:BIIB) released second quarter revenues yesterday. Today, shares have been soaring 4% in reaction to the stellar quarterly results.

Top analyst Eric Schmidt at Cowen notes that for the second straight quarter, the company beat out consensus on top and bottom line numbers, and going forward, the company has devised a comprehensive corporate strategy, which includes; advancing a gene therapy program and taking on Parkinson’s and Alzheimer’s along with a number of other life debilitating diseases, standing by the drug maker’s “commitment to neurology.” Biogen’s Spinraza truly stole the show this quarter, generating $203 million in sales, far outpacing consensus expectations of $70 million.

Due to the resounding success of Spinraz, Biogen has raised 2017 revenue guidance by an additional $400 million from $11.1-11.4 billion to $11.5-11.8 billion. The Street could very well be underestimating this drug maker’s potential to become a colossal force in the biotech world, as Schmidt views “Biogen shares as undervalued based upon a stable outlook for the company’s MS franchise and the blockbuster potential of Spinraza.”

Schmidt likewise notes that last quarter aside from the Spinraza success, Biogen did very well with other drug products, five of which also beat out consensus expectations. Tecfidera, Rituxan and Gazyva, Avonex and Plegridy all outclassed consensus, while Plegridy and Tysabri fell in line with the Street. Also notable was Biogen’s triumph in Europe, which also exceeded expectations by $14 million raking in $91 million, which might be a sign of things to come for Spinraza, as the company is looking to expand this product outside the United States.

As such, the analyst maintains BIIB an Outperform with a $338 price target, which implies a 14% upside from current levels.

Eric Schmidt has a very good TipRanks score with a 66% success rate and a high ranking of #30 out of 4,608 analysts. Schmidt garners 34.3% in his yearly returns. However, when recommending BIIB, Schmidt forfeits 5.8% in average profits on the stock.

TipRanks analytics demonstrate BIIB as a Buy. Out of 14 analysts polled by TipRanks in the last 3 months, 6 are bullish on Biogen stock while 8 remain sidelined. With a return potential of 8%, the stock’s consensus target price stands at $320.29.