Biogen Bull Thesis Baked In, No Longer A Buy At Citi

Analysts at Citi no longer hold a bullish view on Biogen Inc BIIB. The firm's Robyn Karnauskas downgraded Biogen's stock rating from Buy to Neutral with a new $360 price target.

A prior bullish stance on Biogen's stock has been in place since early February and was due to strong expectations for the company's therapy for the treatment of spinal muscular atrophy, a rare neuromuscular disorder, called Spinraza, the analyst said in the downgrade note. Specifically, the analyst's expectations for Spinraza at that time were for pricing above the Street's consensus estimate and lower concerns with Ocrevus in MAS.

"We're downgrading the stock to neutral from buy as we don't think the street fully appreciates Avexis competition and in coming 6-12 months we think MS pricing concerns in form of greater rebating get louder as we approach Gilenya losing patent and Celgene's Ozanimod launch," the analyst said.

As such, the bullish case for Biogen's Spinraza no longer applies. A new $360 price target assumes a lowered discount rate from 9 percent to 8.5 percent and a revised terminal growth from 1 percent to 2 percent.

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