JP Morgan Comments On Biogen Idec Ahead Of Academy Of Neurology Meeting

Biogen Idec BIIB shares have been strong YTD and many investors are questioning the risk / reward profile ahead of next week's AAN meeting. There should be a lot of buzz on the oral agents in multiple sclerosis (MS) at AAN, but what is also a near-term event is the pending approval of the JC virus (JCV) assay for Tysabri. In this report, JP Morgan focuses on the JCV assay impact on Tysabri utilization given that the assay may ultimately be a growth driver for Biogen's MS franchise. JP Morgan consulted with several neurologists and conducted a JCV scenario analysis. Its view is that the JCV assay is likely to keep MS patients on Tysabri, but is unlikely to significantly increase new patient starts. Our scenario analysis highlights a more likely negative impact on 2012 than positive with an upside case of +$150M in Tysabri sales and +$0.29 in EPS but a downside case of - $300M in Tysabri sales and -$0.56 in EPS. Hence, JP Morgan thinks that the risk/reward in BIIB shares is unfavorable ahead of the AAN meeting as well as ahead of BG-12 data and a JCV decision by FDA. JP Morgan has a $65 PT and Neutral rating on BIIB BIIB closed Wednesday at $73.60