Here’s Why Piper Jaffray Remains Sidelined on Biogen Inc (BIIB)

Biogen Inc (NASDAQ:BIIB) is riding the tide of good news after a recent publication has indicated the mechanism in the biotech giant’s pipeline drug Tecfidera, designed to treat relapsing multiple sclerosis, may be related to its suppression of T-lymphocyte activity. Previously, it had been theorized that the true immunosuppressant mechanism had been “Nrf2 activation.”

To Piper Jaffray analyst Joshua Schimmer, this postulation “never made much sense” anyway, a long believer that evidence painted a picture of Tecfidera as an immune suppressant. However, Schimmer explains, “That said, while certainly interesting scientifically, none of this new information changes the fact that Tecfidera faces a patent challenge and uncertain outlook and may not impact Tecfidera’s market share directly.”

“We believe BIIB has previously pushed the envelop with messaging for its drugs (when it communicated rates of PML with Tysabri which by our calculations dramatically understated the true risk) and have long suspected the Tecfidera mechanism was another marketing ‘message’ that was not clearly supported by the facts. Separately, recent P3 results from NVS’ siponimod (S1P1,5 modulator) for SPMS present another competitive threat lurking for BIIB’s MS franchise. These evolving risks offset our enthusiasm for select pipeline programs,” Schimmer concludes.

As such, the analyst reiterates a Neutral on BIIB with a $333 price target, which represents a 6% increase from where the stock is currently trading.

According to TipRanks, which measures analysts’ and bloggers’ success rate based on how their calls perform, one-star analyst Joshua Schimmer is ranked #3,228 out of 4,175 analysts. Schimmer has a 47% success rate and faces a loss of 0.7% in his annual returns. When recommending BIIB, Schimmer loses 11.3% in average profits on the stock.

TipRanks analytics demonstrates BIIB as a Buy. Based on 15 analysts polled in the last 3 months, 8 rate a Buy on BIIB, while 7 maintain a Hold. The 12-month price target stands at $343.57, marking a 10% upside from where the shares last closed.  screen-shot-09-22-16-at-07-21-pm

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