Raymond James: Biogen's Business Appears Fragile, Faces Many Headwinds

Last month, Biogen Inc BIIB halted Phase 3 trials for aducanumab in March based on results of a futility analysis conducted by an independent data monitoring committee.

While the remaining business is not busted, it does seem fragile, with the company facing headwinds in both multiple sclerosis and spinal muscular atrophy, according to Raymond James.

The Analyst

Raymond James’ Steven Seedhouse resumed coverage of Biogen with a Market Perform rating.

The Thesis

Biogen’s MS franchise is facing several risks, including new launches like Celgene Corporation CELG's ozanimod;  Novartis AG NVS's Mayzent; Merck's Mavenclad; a pending IPR decision on Biogen's Tecfidera IP and pricing that's subject to intense political pressure in the U.S., Seedhouse said in a Tuesday note. 

In the spinal muscular atrophy arena, the annual sales of Spinraza have already peaked, with market share remaining flat and the dosing mix shifting from loading to maintenance, the analyst said. The latter signifies a massive cut in the gross price, from $750,000 to $375,000 per year per patient, he said. 

Spinraza sales will be further impacted by the launches of Zolgesma by Novartis and risdiplam by Roche Holding and PTC Therapeutics, Inc. PTCT, Seedhouse said. 

Biogen seems to understand the challenges ahead “to retool the business outlook and growth prospects in a stepwise manner,” the analyst said. 

Price Action

Biogen shares were trading down 0.13 percent at $237.28 at the time of publication Wednesday. 

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