Biogen stock jumped Thursday on a fresh buy rating even as the controversy surrounding Alzheimer’s drug Aduhelm became more complicated.
A Washington, D.C.-based neurology practice called The Neurology Center banned all Biogen (BIIB) representatives, not just those selling Aduhelm, Mizuho Securities analyst Salim Syed said in a note to clients. A sign on the center’s door says Biogen pharmaceutical representatives “are no longer welcome in our offices,” and cites the Aduhelm controversy.
Aduhelm gained an accelerated approval, but testing still hasn’t borne out its clinical benefit. Instead, Aduhelm was approved based on its ability to remove the buildup of amyloid plaque in patients’ brains. The plaque is a hallmark of Alzheimer’s disease.
“We object to the methods employed by Biogen causing this medication of dubious effectiveness and posing significant statistical risk being approved by the (Food and Drug Administration) over the objections of the entire FDA physician advisory panel,” the center said in its sign.
Biogen said patients who are denied access to Aduhelm should reach out to the company directly.
“Patients and their families deserve to have choice and access to FDA approved treatments, including the only Alzheimer’s disease treatment that addresses a defining pathology of the disease,” the company said in a statement emailed to Investor’s Business Daily.
Biogen Stock Rises On Buy Rating
Biogen stock popped 1.3% to 293.20 on today’s stock market.
Needham analyst Ami Fadia initiated coverage of Biogen stock with a buy rating and 400 price target. She says Aduhelm’s initial ramp will come in slower than expected. The Neurology Center isn’t the only practice to hold off administering Aduhelm.
Still, Fadia expects $6 billion in 2026 sales of Aduhelm. This will take place as Biogen’s bread-and-butter multiple sclerosis business faces a growing number of generic rivals. Fadia expects the current pipeline to drive $3 billion in 2026 sales, rising to $6 billion in 2030.
“Our physician survey suggested that insurance coverage is likely to be a hurdle for adoption initially,” she said in a note. “However, we believe that given the large market and significant unmet need, Aduhelm will be a significant blockbuster.”
Physicians expect Aduhelm to treat 24% of people with mild Alzheimer’s disease, 14% of moderate patients and 5% of those with severe symptoms, she said.
Neurology Centers Notes Pricing Issue
Biogen stock has risen by double digits this year despite ongoing struggles with its Aduhelm launch. Earlier this year, Chief Executive Michel Vounatsos said the launch was slower than expected and that Biogen would likely have to trim its already low forecast for Aduhelm sales.
Part of the problem stems from Biogen’s pricing strategy for Aduhelm. Aduhelm costs $56,000 a year before insurance and rebates. Critics say that price could have a severe impact on the Centers for Medicare and Medicaid Services. CMS is currently deciding whether it will cover Aduhelm.
The Neurology Center noted the pricing issue in its sign.
“Biogen’s subsequent announcement of pricing at a level beyond anyone’s definition of reasonableness is potentially destabilizing to the entire system of paying for medical care and, to us, is irresponsible and unconscionable,” the center said. “As physicians, we feel compelled to speak out and protest Biogen’s actions.”
Mizuho’s Syed has a neutral rating and 300 price target on Biogen stock.
Follow Allison Gatlin on Twitter at @IBD_AGatlin.
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