Biogen Inc. (NASDAQ:BIIB) received a Market Perform rating from Raymond James as the firm resumed coverage on the biotechnology company's stock. The rating reflects a cautious stance on Biogen's near-term prospects, particularly regarding its product launches and sales momentum.
The analyst from Raymond James highlighted that their previous upgrade at the end of last year hinged on three key expectations: a stronger launch for the Alzheimer's treatment Leqembi, approval of the subcutaneous (SC) version by the end of 2024, and the continued success of Skyclarys to compensate for declines in the company's base business. However, as the year comes to a close, only one of these factors has materialized as anticipated.
Leqembi's market performance has been underwhelming, failing to meet the high expectations set for it. The analyst noted that the drug's current trajectory does not align with predictions of it becoming a multi-billion dollar success. Moreover, the anticipated SC formulation, which was expected to bolster adoption, has now been delayed until 2026, further dampening the drug's short-term prospects.
Despite Biogen's efforts to engage in earlier stage deals, concerns remain that the company's revenue has not yet found its lowest point. The combination of these factors is expected to continue weighing on Biogen's stock, as the analyst anticipates these challenges will persist as an overhang.
The Market Perform rating implies that Raymond James does not foresee significant stock movement for Biogen in the immediate future and suggests a neutral outlook on the company's shares. This stance is taken in light of the slower-than-expected uptake of Leqembi and the delayed availability of its SC version, along with the ongoing need for Biogen to stabilize its revenue streams.
In other recent news, Biogen Inc. has made substantial progress in various areas. The company's investigational drug, felzartamab, received Breakthrough Therapy Designation from the U.S. Food and Drug Administration for the treatment of a specific type of kidney transplant rejection. The designation is expected to expedite the development of this potential treatment.
Biogen also reported advancements in its DEVOTE study, suggesting potential clinical benefits of a higher dose regimen of nusinersen for individuals with spinal muscular atrophy. The company plans to submit regulatory applications globally for approval of the higher dose regimen.
In financial news, Biogen reported a total revenue of $2.5 billion in its second-quarter results. Analyst firms including BMO Capital, Baird, TD Cowen, RBC Capital Markets, and Mizuho Securities have maintained an Outperform rating for the company.
In collaboration with UCB, Biogen reported successful results from a Phase III trial of Dapirolizumab pegol for treating Systemic Lupus Erythematosus. Furthermore, in partnership with Samsung (KS:005930) Bioepis, Biogen reached a significant regulatory milestone with their biosimilar, OPUVIZ™, recommended for marketing authorization by the European Medicines Agency's Committee for Medicinal Products for Human Use.
Biogen expanded its Board of Directors with the appointment of Lloyd B. Minor, M.D., and Sir Menelas (Mene) Pangalos, Ph.D. These recent developments highlight Biogen's commitment to enhancing treatment options for diseases with unmet medical needs and expanding its product offerings in the biotechnology sector.
InvestingPro Insights
To complement Raymond James' cautious stance on Biogen Inc. (NASDAQ:BIIB), recent data from InvestingPro offers additional context for investors. Despite the challenges highlighted in the article, InvestingPro Tips indicate that Biogen remains a "Prominent player in the Biotechnology industry" and is "Profitable over the last twelve months." These factors suggest the company maintains a strong industry position despite current headwinds.
The company's financial metrics provide a mixed picture. Biogen's P/E Ratio (Adjusted) stands at 15.46, which is lower than its unadjusted P/E of 23.17, potentially indicating some value for investors. However, the revenue growth of -3.0% over the last twelve months aligns with the analyst's concerns about declining sales momentum.
Interestingly, Biogen is "Trading near 52-week low," with its stock price at 68.95% of its 52-week high. This could present an opportunity for investors who believe in the company's long-term prospects, especially considering that InvestingPro's Fair Value estimate of $236.31 is significantly higher than the current trading price.
For readers seeking a more comprehensive analysis, InvestingPro offers 7 additional tips for Biogen, providing a broader perspective on the company's financial health and market position.
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