Argus Downgrades Biogen On Trial Delays, Competition In MS, Alzheimer's Drugs

Biogen Inc BIIB tumbled 8 percent Wednesday after announcing a cohort expansion for its aducanumab Alzheimer’s trials — a change certain to delay results.

The news, coupled with expected sales declines, has converted one analyst from an advocate to an observer.

The Rating

Argus analyst David Toung downgraded Biogen from Buy to Hold.

The Thesis

As it is, Argus expects sales of Biogen’s multiple sclerosis drugs to wane as the one-time inventory factors behind a strong fourth quarter fail to recur. Increased competition from Roche Holdings Ltd., Mylan NV and Celgene Corporation CELG products, compounded by pricing pressure in the Medicaid and 340B hospital channels, won’t help.

“Although Biogen receives royalties on [Roche’s] Ocrevus sales, they will not be enough to offset the expected declines in other MS products,” Toung said in a Friday note. (See the analyst's track record here.) 

Revenue from the Roche partnership on anti-CD20 programs is also forecasted to slow.

At the same time, the firm’s multidose Spinraza for spinal muscular atrophy will field fresh rivalry in 2019 from a single-injection AveXis Inc AVXS therapy.

Price Action

Biogen shares were down 0.56 percent at $297.71 after the open Friday morning. 

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