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Biogen Analysts Laud FDA Extension of Alzheimer's Drug Review

Analysts react positively to the FDA’s three-month extension of the review period for Biogen’s aducanumab Alzheimer’s treatment.
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Biogen  (BIIB) - Get Biogen Inc. Report shares rose Friday as analysts reacted positively to the Food and Drug Administration's decision to extend by three months the review period for Biogen’s aducanumab Alzheimer’s treatment.

That “seems like a bullish sign,” Stifel analyst Paul Matteis wrote in a commentary cited by Bloomberg. 

“Why is a major amendment, or the need for new data, bullish? … The extension of any review on the receipt of additional clinical analyses would suggest that FDA is strongly considering approval.”

He raised his price target to $358 from $258. 

The Cambridge, Mass., biopharmaceutical company’s stock recently traded at $294.94, up 10%. It has jumped 21% over the past three months, compared with 15% for the S&P 500.

The new price target indicates 34% upside from Thursday's close.

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Truist analyst Robyn Karnauskas agrees with Matteis. “Our key takeaway is that if the FDA would have wanted to reject the drug, we would have heard the decision by now,” she said, according to Reuters.

Morningstar analyst Karen Andersen puts fair value at $346 for Biogen stock.

Biogen's "specialty-market-focused drug portfolio and novel, neurology-focused pipeline create a wide economic moat,” she wrote in November. 

“Biogen's strategy has its roots in the 2003 merger of Biogen (multiple sclerosis drug Avonex) and Idec (cancer drug Rituxan),” she explained.

“Rituxan's market penetration is high, and patents in the United States (where Biogen derives its profit share from Roche) expired in 2018, leading to biosimilar approvals in the U.S. in late 2019. 

"While this pressures Biogen's profit share, subcutaneous Rituxan as well as novel antibody Gazyva will allow for extended oncology revenue.”