This Analyst Takes Biogen (BIIB) Alzheimer’s Failure Personally
It’s a short and dramatic plunge for Biogen (BIIB) stock.
Today, the biotech giant’s shares lost 29% of their value and reached levels not seen since 2016. This collapse was triggered by the announcement that Biogen’s Alzheimer’s disease drug aducanumab would be discontinued. The decision comes following the results of a futility analysis conducted by an independent data monitoring committee, which determined the studies would be unlikely to achieve statistical significance on the primary endpoint of CDR-SB. In addition, the company will also stop the Phase II EVOLVE study monitoring the safety impact of aducanumab in patients with ARIA and the Phase Ib PRIME long-term extension study.
As aducanumab joins the list of anti-Aβ antibodies that failed to show a benefit in Alzheimer’s patients, Mizuho analyst Salim Syed downgrades BIIB stock from Buy to Neutral, while slashing the price target to $235 (from $416). (To watch Syed’s track record, click here)
Syed commented, “So first things first, I was wrong, I’ll be the first to admit it. We liked Aducanumab. But it’s clear now, Aducanumab is dead, and we’d argue so is the beta-amyloid hypothesis. The one-liner here is we just don’t see much to be excited about (not much else in the pipeline, Tecfidera litigation risk ~12 months from now, upcoming Spinraza competition and a flat to declining MS base business). The key questions I’m getting all addressing the broader question: Where to from here for BIIB? […] Zero pipeline on a DCF basis is ~$215. There’s about ~$20 / share in remaining pipeline value (assuming 0% Aducanumab, and 2.5% POS for E2609 and 2.5% POS for BAN2401). So, $235 in total.”
All in all, BIIB stock has gotten a whopping 9 downgrades, and numerous price target cuts. Out of 23 analysts polled by TipRanks in the last 3 months, 6 remain bullish, while 17 are sidelined. With a return potential of 33%, the stock’s consensus target price stands at $301.33. (See BIIB’s price targets and analyst ratings on TipRanks)