Biogen‘s (BIIB) future isn’t only wrapped up in Alzheimer’s treatment aducanumab, an analyst said Thursday as he identified two events that could stoke Biogen stock.
Both events are low probability, but could help prop up Biogen stock.
The first is a positive decision on an appeals case pertaining to blockbuster multiple sclerosis drug Tecfidera. Biogen expects to lose the appeal as generics chomp on Tecfidera sales. The company could also unveil new data for another potential Alzheimer’s drug.
“If either (event) hit, the stock is likely going higher,” Mizuho Securities analyst Salim Syed said in a report to clients. He has a neutral rating and 244 price target on Biogen stock.
Biogen Stock Faces Tecfidera Appeal
Tecfidera is Biogen’s biggest moneymaker. In 2020, the drug generated $3.84 billion sales with $2.68 billion of that coming from the U.S. In its fourth-quarter earnings release, the company called for a “financial reset in 2021” as Tecfidera generics enter the market.
But it’s possible the appeals court could side with Biogen, Syed said. That would be a boon for Biogen stock. If this happens, it could push out Tecfidera generics to 2028 based on a patent for the method of delivery, he said.
He expects a decision “any day.” Oral arguments took place in early December. To compare, the Federal Circuit Court of Appeals issued decisions in appeals cases of Amgen‘s (AMGN) Repatha and Enbrel within four months, he said.
Another Alzheimer’s Treatment
The other potential Biogen stock catalyst is another experimental Alzheimer’s drug called gosuranemab.
“There is very little in stock for this drug, so again, risk/reward skewed up,” he said.
That’s because Biogen previously studied gosuranemab as a treatment for a brain disorder called progressive supranuclear palsy. It failed to make a difference there, however. Biogen discontinued its efforts in that disease and switched over to testing in Alzheimer’s.
Biogen finished enrolling patients in the Phase 2 study in July or August 2019, Syed said. The study is designed to last 78 weeks. That puts the results in February 2021.
“So, it’s likely that Biogen has now had this data for about four weeks,” he said. “If there is anything meaningful here, top line readout could be any day.”
Low RS Rating
In midday trading on the stock market today, Biogen stock rose 2.2%, near 271.40.
On a year-to-date basis, Biogen stock has climbed more than 10%. But shares have a poor Relative Strength Rating of 18 out of a best-possible 99. This means Biogen stock outranks just 18% of all stocks in terms of 12-month performance, according to IBD Digital.
Biogen representatives didn’t immediately return a request for comment.
Follow Allison Gatlin on Twitter at @IBD_AGatlin.
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