Some Biogen Analysts Unimpressed By Explanation For Aducanumab Filing Delay

Biogen Inc BIIB shares shed close to 10% Wednesday following the revelation that the BLA filing for the company's Alzheimer's investigational drug aducanumab will be delayed.

The Biogen Analysts

Barclays analyst Carter Gould maintained an Overweight rating on Biogen shares and lowered the price target from $389 to $370.

Credit Suisse analyst Evan Seigerman reiterated a Neutral rating and lowered the price target from $344 to $310.

Oppenheimer analyst Jay Olson maintained an Outperform rating and $365 price target.

Raymond James analyst Steven Seedhouse downgraded Biogen shares from Market Perform to Underperform.

Barclays: Investors Will Eventually Return To The Story

The delay in the aducanumab filing and the insufficient explanation offered for the six-month delay justify the 9% reset in the stock Wednesday, Barclays analyst Gould said in a note.

The aspects that warranted approval such as unmet need, effect at higher doses and a lack of emerging options justify Barclays' expectation for a 60% probability of success, the analyst said.

"More pragmatically, the commercial opportunity is still significant enough that investors will return to the story as timelines narrow between now and the new BLA submission estimate." 

Any potential approval will now be in 2021, most likely in the second half of the year, he said.

Barclays attributed the price target reduction to the delayed aducanumab launch in its model to January 2022 and a slower Vumerity ramp.

See also: The Daily Biotech Pulse: FDA Nod For Immunomedics, Lilly's Solid Q1 Beat, Predictive Oncology Restructures Debt

Credit Suisse: Risk-Reward Less Favorable Through 2020

With hopes of 2020 being the year of aducanumab now evaporating, issues that were previously of lesser concerns have now become more prominent, Credit Suisse analyst Siegerman said in a note.

Notably, the analyst expressed concerns about the upcoming Tecfidera court challenges in West Virginia and Delaware, scheduled for midyear.

Unable to gauge the reasons for the delay, Siegerman trimmed his probability of success estimate for aducanumab from 60% to 50% on higher risk due to the delay.

"While the filing may ultimately be successful, the near-term risk to the business and sentiment is high — hence why we're remaining on the sidelines."

Oppenheimer: Near-Term Risk To Business, Sentiment ‘High'

Biogen's commentary on efforts to submit a regulatory filing fell short of expectations, despite the complexities of a disrupted and mixed registrational dataset further impacted by the COVID-19 pandemic, Oppenheimer analyst Olson said in a note.

The analyst said he believes the BLA submission is now rolling in three modules, with completion of the filing expected in the third quarter.

"While the filing may ultimately be successful, the near-term risk to the business and sentiment is high—hence why we're remaining on the sidelines."

The company's update shows encouraging receptive and encouraging signals coming from the FDA, Olson said. 

RayJay: Factoring In An Aducanumab Rejection

Raymond James' conviction in aducanumab being rejected by the FDA has increased following Biogen's changed timeline, Seedhouse said in a note. The analyst had already modeled a zero percent probability of success for the investigational drug.

The analyst said he is bearish on Biogen for the following five reasons:

• Absence of an immediate aducanumab-related catalyst, given a summer pre-BLA meeting and third-quarter filing schedules.
• Risk to the third-quarter timeline.
• Risk of a "refuse-to-file"  rejection after the BLA is filed, if it's filed at all. 
• Reduced chance of aducanumab bull thesis playing out until probably late 2021, assuming a standard approval review.
• Valuation floor, excluding aducanumab, of $226/share.

BIIB Price Action

Biogen shares were down 2% at $292.01 at the time of publication Thursday.

Related Link: BioNTech, Immunic Soar On COVID-19 Developmental Updates