Biogen's Core Business Impresses While Potential Alzheimer's Catalyst Looms

Analysts at Morgan Stanley turned bullish on Biogen Inc BIIB as the company's phase 3 Alzheimer's catalyst could "make all its potential issues disappear." The firm's Matthew Harrison upgraded Biogen's stock rating from Equal-Weight to Overweight with a price target boosted from $311 to $375 (see Harrison's track record here).

Biogen has multiple therapies to treat Alzheimer's in its pipeline, including a lead candidate called Aducanumab which is currently undergoing a phase 3 trial, Harrison commented in his upgrade note. Expectations are calling for a readout of the trial in late 2019 or early 2020, but an Alzheimer's related catalyst could come sooner in a phase 1b follow-up at CTAD in November.

Beyond Alzheimer's, Biogen's SMA drug Spinraza realized the best launch of any orphan asset with $300 million in sales in just the first two quarters after launch, Harrison continued. The therapy could realize peak sales of $4 billion and the therapy could boost the company's topline growth rate by 3 to 4 percent. This would imply that Biogen will be a "mid-single digit percent grower" heading into the key catalyst of Alzheimer's data releases.

Aside from the company's therapies, Biogen's "strong" balance sheet could fund additional M&A activity, the analyst concluded. These forms of business development could prove to be a way for management to "supercharge growth."

At time of publication, shares of Biogen were up 3.67 percent at $326.48.

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