Biogen Inc (BIIB) Shares Slump as Spinraza US Sales Disappoint, But This Top Analyst Upbeat

Eric Schmidt views BIIB shares as undervalued based upon a stable MS franchise and Spinraza's potential.


Biogen Inc (NASDAQ:BIIB) shares dived 5% in Tuesday’s trading session, after US sales of Spinraza, a spinal muscular atrophy (SMA) drug, fell short of Wall Street estimates in the third-quarter. Though 3Q sales of Spinraza came in above Street’s expectations, or $271 million compared with the consensus of $253 million, U.S. sales for the drug barely budged, coming in at $198 million, lagging analysts’ average estimate of $242 million. The shortfall was due to the dosing regimen of the drug, which was approved in December, as fewer patients took the more frequent “loading”, or initial, dose, Biogen CEO Michel Vounatsos said on an earnings call.

Cowen’s top analyst Eric Schmidt commented: “For the third consecutive quarter of 2017 Biogen easily exceeded bottom line expectations. The main drivers continue to be Spinraza’s record breaking launch, the resiliency of the company’s MS franchise in the face of new competition (Roche’s Ocrevus), and cost controls. As Spinraza failed to reach the high end of speculated sales and U.S. sales growth appears to be decelerating, there will be questions about the drug’s trajectory. Nonetheless, with ex-U.S. sales just beginning (Japan came online in late August; EU reimbursement in its early days) we expect much future growth. Inclusive of royalties on Ocrevus, BIIB’s MS franchise declined just 1% Y/Y. We believe this business is more stable than many appreciate.”

As such, Schmidt reiterates an Outperform rating on Biogen stock with a price target of $338, which implies an upside of 7% from current levels.

According to TipRanks.com, which measures analysts’ and bloggers’ success rate based on how their calls perform, analyst Eric Schmidt has a yearly average return of 42.9% and a 67% success rate. Schmidt has a -0.9% average return when recommending BIIB, and is ranked #21 out of 4705 analysts.

Out of the 24 analysts polled in the past 12 months, 15 rate Biogen stock a Buy, while 9 rate the stock a Hold. With a return potential of 10%, the stock’s consensus target price stands at $347.14.

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