Biogen Analysts Brace For Favorable Aducanumab Adcom Verdict

Biogen Inc BIIB shares saw a nice 40% bump Wednesday following the release of FDA briefing document prepared for Friday's Adcom meeting to discuss aducanumab BLA.

Morgan Stanley analyst Matthew Harrison maintained an Overweight rating and $357 price target.

BofA Securities analyst Geoff Meacham upgraded Biogen from Underperform to Neutral and increased the price target from $230 to $360.

BTIG analyst Thomas Shrader maintained a Neutral rating.

High Likelihood of Ultimate Aducanumab Approval: FDA's position is highly supportive of aducanumab approval, with the questions presented to the panel structured to reinforce FDA's position, Harrison said.

Notwithstanding the statistical review, which is the only negative data point, the outcome of the Adcom meeting is likely to be positive.

"Overall, we now believe there is a high likelihood of ultimate FDA approval of aducanumab," Harrison wrote in the note.

Related Link: Attention Biotech Investors: Mark Your Calendar For These November PDUFA Dates

Favorable Briefing Document Surprising: The favorable briefing document surprised BofA, given the positive regulatory opinion of a very mixed dataset supporting the BLA filing.

The BLA had substantial issues with the data, and there was skepticism within the community over the potential for approval on this cycle, Meacham said, citing the firm's analysis.

Aducanumab could still likely face a vigorous debate at Friday's AdCom, with the potential for a negative review and final vote.

"And we still have concerns over aducanumab's efficacy and continue to believe that prescriber skepticism, payer resistance, and other factors are likely to limit its uptake," the analyst wrote in the note.

Given the increasing likelihood of approval in some form, BofA upgraded the shares and raised the price target, based on higher aducanumab sales.

Blockbuster Potential: Positive briefing document points to a favorable outcome from Friday's Adcom meeting, Shrader said. Biogen's long insistence that the filing was done in conjunction with the agency seems validated.

"Overall, the FDA appears generally aligned with Biogen's arrival at a favorable risk/benefit profile for aducanumab," the analyst wrote in the note.

The "kind eye" by the FDA suggested the agency appreciated how complex drug development is in the neurodegeneration field at a time when several companies seem to be mired in technical hurdles, Shrader said. As such, BTIG raised its probability of success for aducanumab from 50%, to 85%, added EU sales to its model, and shortened time to launch by one year.

The drug is likely to fetch $5.8 billion in worldwide sales by 2025. The firm, however, cautioned of significant uncertainty around the commercial uptake of Aducanumab.

BIIB Price Action: After surging 40% in the previous session, Biogen shares were down 6.6% to $332.14 at publication time.