5 Biogen Analysts On FDA Approval Of Alzheimer's Drug Aduhelm, Broad Label, Pricing

Biogen Inc.'s BIIB Alzheimer's treatment Aduhelm was approved by the FDA Monday, sending the company's shares up over 38%. 

The Biogen Analysts: Morgan Stanley analyst Matthew Harrison maintained an Overweight rating on Biogen shares and increased the price target from $343 to $455.

H.C. Wainwright analyst Andrew Fein maintained a Buy rating and hiked the price target from $305 to $452.

Canaccord Genuity analyst Sumant Kulkarni reiterated a Buy rating and $359 price target.

BofA Securities analyst Geoff Meacham reiterated a Neutral rating and $400 price target.

SVB Leerink analyst Marc Goodman maintained an Outperform rating. 

Morgan Stanley Sees Robust Drug Launch Ahead: Following the FDA approval of Aduhelm, the investor debate is likely to move to the drug's launch speed, including how payers will respond, the availability of infusion sites and post-approval, Harrison said in a note.

"Given limited competition and broad patient need, we expect a robust launch with limited access issues," the analyst said.

Morgan Stanley raised its net price assumption for Aduhelm from $20,000 to $35,000 but lowered its penetration estimate, assuming more abandonment/payer pushback due to the better-than-expected price.

H.C. Wainwright On The FDA's Thinking: Biogen's long-winding roller coaster ride with respect to its anti-Abeta antibody Aduhelm has come to an end, and the door is now open for several other pipeline products, Fein said in a note. 

The approval also brings hope to millions of patients suffering from a tragic disease and might allow for a range of future therapeutic choices, the analyst said.

Like Merck & Co., Inc.'s MRK Keytruda, the approval might also open up the doors for combination therapies, he said. 

The accelerated approval FDA granted came as a surprise, Fein said.

The FDA's decision, the analyst said, was based primarily on the drug's ability to target Abeta, although the agency did agree that there might be "residual uncertainty" regarding aducanumab's ultimate clinical significance. Biogen showed a clear reduction in Abeta that might predict clinical benefit, the analyst said.

Aduhelm's Impact On The Alzheimer's Drug Market: The Aduhelm label is as good as it gets given that it does not limit the drug's use by stage of Alzheimer's disease or by genetic markers, Kulkarni said in a note.

The label strikes a lenient tone by saying "continued approval for this indication may be contingent upon verification of clinical benefit in confirmatory trial(s)," the analyst said. 

Biogen could see an initially measured ramp relative to the large size of the Alzheimer's disease market, he said.

Although some profit-taking in Biogen shares cannot be ruled out, Aduhelm's approval allows Biogen to go on the offensive as opposed to the current defensive stance that's forced by competition to core products such as Tecfidera and Spinraza, Kulkarni said. 

"We also like the setup for BIIB going into partner's SAGE's imminent Ph. 3 WATERFALL top-line data for zuranolone (major depressive disorder), which we also view as a product with significant market potential."

Given the net list price is $56,000 per year, Biogen's list price could come in much higher than Canaccord's net price estimate of $8,500 per year, the analyst said. 

From a payer perspective, confirmatory trials and/or testing periods and hurdles for amyloid plaque levels will decide the continued access to the drug, he said. 

Canaccord sees Aduhelm approval as "a tide that lifts many boats," Kulkarni said, adding that the firm sees companies developing products for neurodegenerative diseases and symptom management products to benefit from Aduhelm's approval.

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Why BofA Is Puzzled By FDA Decision: The FDA's decision to approve Aduhelm with a broad label despite developmental and regulatory uncertainties is puzzling, Meacham said in a note. 

The launch is a narrative change for Biogen, the analyst said. 

"While we recognize the political dynamics supporting approval, we'd argue FDA's new approval criteria is likely to cause commercial and development uncertainty." 

Confusion prevails over which patients were likely to benefit given the lack of guidance, the analyst said, citing neurologists.

The price point also worried many, as payers are now justified restricting access, he said, given regulators that, in a sense, conceded there may not be clinical benefit. 

The observed reductions in a-beta plaques cited by the FDA for Aduhelm may apply not only for Lilly's donanemab but also candidates like Lilly's solanezumab and Pfizer, Inc.'s PFE bapineuzumab, according to BofA.

"Approvals of these agents based on this metric alone could further complicate the treatment paradigm given no clear insights into clinical value," Meacham said. 

SVB Leerink's Takeaways From A Key Opinion Leader: A key opinion leader who spoke with SVB Leerink was surprised to see Aduhelm approved with a broad label, Goodman said in a note. 

The data might make it difficult to justify the high price tag but many patients who are eligible to take Adu would eventually be on this product, the analyst said, citing the KOL.

The KOL said they expect payers and physicians to set their own restrictions for a subpopulation of patients, and added the uptake will be slow and depend on center infusion capacity and payer access.

"Nothing we heard changes our view that Adu should become a significant product in the Alzheimer's space, and we maintain our Outperform rating of the stock," Goodman said. 

BIIB Price Action: After Monday's rally, Biogen shares are cooling off Tuesday and were down 1.87% at $388.44 at last check. 

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