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Biogen Lifted to Neutral at Bank of America, Baird After FDA Approval

Biogen slipped Tuesday. On Monday the stock surged after the FDA cleared for marketing Biogen's aducanumab Alzheimer’s treatment.
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Biogen  (BIIB) - Get Report was upgraded to neutral at Bank of America and Baird after Monday’s decision by the FDA to clear the company’s Alzheimer’s treatment for marketing.

The stock of the Cambridge, Mass., company recently traded at $385.81, down 2.5%. The shares leaped 38% on the Food and Drug Administration approval, reported Monday.

Bank of America analyst Geoff Meacham lifted his rating from underperform and lifted his price target to $400 from $235.

“Our prior view was not correct: The accelerated approval of aducanumab [the Alzheimer’s drug] was a surprise to us, not the least of which reflects the generally open label, which doesn’t restrict access to patient subtypes,” he wrote in a commentary.

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To be sure, Aduhelm -- the brand name of the treatment -- "is likely to disappoint commercially given confusion over the benefit and payer pushback,” Meacham said.

Bloomberg News reports that Biogen has priced the drug at $56,000 a year.

Baird analyst Brian Skorney raised his rating from underperform and raised his price target to $382 from $216.

“Although we certainly disagree with the decision, FDA approval of Aduhelm deals a fatal blow to our bear thesis,” he wrote.

“The debate now shifts to launch, payer roadblocks, and whether near-term competition can emerge from Lilly  (LLY) - Get Report and others with plaque-reducing agents.”

Lilly shares were recently off 1.9% at $218.22. They had jumped 10% on Monday.

In other recent drug news, the U.S. Supreme Court last week declined to hear Johnson & Johnson’s  (JNJ) - Get Report appeal of a $2.1 billion penalty from a Missouri court that linked ovarian cancer to its talc products.

The decision leaves Johnson & Johnson liable for at least $2.1 billion in payments to 22 women.