Biogen (BIIB) - Get Report is the large-cap Biotech "stock to watch in 2016," driven by the advancement of its pipeline, according to Citi, which initiated coverage of the stock with a Buy rating.

UPSIDE POTENTIAL: Biogen is working on new treatments for Alzheimer's, Spinal muscular atrpophy and multiple sclerosis, Citi analyst Robyn Karnauskas stated in a note to investors. Data will be reported for all three of these treatments between this month and mid-2017, and each of the drugs have "mega-blockbuster" potential, Karnauskas believes. Although Biogen's pipeline is "highly risky," the current stock price doesn't reflect any value for the drugs under development, making the stock's risk/reward ratio positive, the analyst wrote. Given the near-term data readouts, Biogen has the highest potential upside in the space in the next 12 months, according to Karnauskas. The analyst, who sees potential for $90 of share upside over the next 12-18 months from the company's pipeline alone, set a $354 price target on the shares.

WHAT'S NOTABLE: Three other biotech companies with positive outlooks are Gilead (GILD) - Get Report , Celgene (CELG) - Get Report and Regeneron (REGN) - Get Report , Karnauskas contended. Analysts are undervaluing Gilead's core business and its ability to execute, while Celgene and Regeneron have "good pipelines and above average growth," along with "solid" core businesses, the analyst believes. Regeneron's pipeline is less risky than many of its peers, thanks to strong Phase 2 data it has reported, and data for the company's atopic disease treatment, Dupilumab, could boost the stock this year, the analyst believes. The shares of both Celgene and Regeneron do not reflect much value from the company's pipelines, added Karnauskas. She set a $130 price target on Celgene, a $480 price target on Regeneron and a $110 price target on Gilead.

PRICE ACTION: In early trading, Biogen rose 2% to $262.34, Gilead added 0.8% to $90, and Celgene and Regeneron were little changed.

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