Biogen's Catalysts May Be Waning; Leerink Downgrades To Market Perform

Leerink’s Geoffrey Porges pointed out in a note the meaningful catalysts that had been expected for Biogen Inc BIIB “have passed, mostly positively, and generated some value for investors; the incremental catalysts from here look relatively limited.”

The analyst downgraded the company from Outperform to Market Perform, while lowering the price target from $305 to $300.

Catalysts Waning

“Our downgrade is based on a slower than expected ramp for Spinraza, and the completion of the series of important catalysts that have evolved over the last few months,” Porges explained.

The analyst lowered the revenue estimate for 2017 by 1 percent, with the revenue estimate for later years being lowered by 2-3 percent.

“These adjusted forecasts are now more or less in line with consensus, and in fact consensus expectations for Spinraza have also been reduced recently,” Porges stated, while adding, “We are not particularly positive about the other programs in Biogen’s late stage pipeline such as BIIB074, BIIB059, STX100 and opicinumab (antiLINGO).”

Related Link: Morgan Stanley Takes A Breather On Biogen, Downgrades Stock

Risks Emerging

The analyst mentioned factors that had earlier been seen as opportunities for Biogen’s stock, such as new product launch, acquisition potential and trial results, now appear to be risks, with material competition appearing for the company’s key MS (multiple sclerosis) franchise, along with slower than anticipated near term adoption of Spinraza, and expectations of another two years at least being required before the results for the Alzheimer’s disease program emerge.

“The likelihood of significant M&A interest in the company also seems diminished given new management appointments, completion of the spin out, some resistance to Spinraza’s launch and lower confidence in beta amyloid intervention for Alzheimer’s disease,” Porges went on to say.

In addition, Biogen continues to face risk associated with the upcoming patent litigation and the interference filing regarding Tecfidera.