Shares of Biogen Idec Inc. (NASDAQ: BIIB) increased 6.4% on Tuesday following positive interim results from an early-stage study of its Alzheimer’s disease treatment called BIIB037 that attacks amyloid plaques in the brain. As a result of the rise in trading volume, Biogen’s market value increased by about $4.7 billion.
Biogen Idec Vice President Doug Williams claimed the treatment had a considerable effect on cognition among patients who participated in the 54 week study during Phase I studies, and saw a decline in amyloid deposits on the brain.
The company is now planning to move “aggressively” into Phase III, the most advanced stage of studies. This is generally the last step before seeking regulatory approval.
Williams stated, “[There are] lots of caveats, obviously, because we’re still early in the clinical program, but encouraging enough data to really have us pull the trigger on moving forward aggressively to plan for Phase III.” .
Many major biopharmaceutical companies have attempted to develop a treatment to fight Alzheimer’s with little to no success.
On December 2nd, Deutsche Bank analyst Robyn Karnauskas reiterated a Buy rating on Biogen Idec with a $430 price target following the announcement of the company’s interim results of BIIB037. She noted, “We see FV of Alzheimer’s at $58/sh for BIIB at 100%. We believe the street could be assigning 25-50% probability with this first success and see upside of $15-$29/sh to stock. We think the today’s stock move of ~22/sh fairly represents the potential upside at this stage.”
Karnauskas currently has a 73% success rate recommending stocks with a +14.8% average return per recommendation. She has rated Biogen 8 times since April of this year with 75% success.
Similarly, BMO Capital analyst Jim Birchenough reiterated an Outperform rating for the stock on December 2nd with a $474 price target. He reasoned, “Overall, data are better than expected, with statistically significant improvement in cognition not anticipated in such a smaller study. Internal consistency of data, including dose and time dependence of Ab clearing as well as FDG-PET improvement in synaptic function in the brain, lend further support for a meaningful biologic and clinical effect that should be reproduced in phase 3.”
Birchenough has a 63% success rate recommending stocks with a +47.5% average return per recommendation.
On average, the top analyst consensus for Biogen Idec is Strong Buy.