On Friday, Piper Sandler adjusted its outlook on Biogen (NASDAQ:BIIB) shares, reducing the price target to $313 from $335. Despite this change, the firm maintained its Overweight rating on the stock.
The revision comes in light of new survey data suggesting that Biogen's Alzheimer's drug, Leqembi, is encountering significant adoption challenges in the medical community.
The analyst at Piper Sandler noted that although access restrictions for Leqembi have been relaxed, doctors are growing concerned about the drug's safety and risk/benefit profile. This perception is not expected to lead to Biogen's previously anticipated revenue increase in the short term. Consequently, the firm has scaled down its revenue projections for Leqembi both in the near and longer term.
The recalibration of revenue estimates has led to the price target adjustment, which is in line with Piper Sandler's valuation methodology. Despite the lowered expectations for Leqembi, the firm believes that the new price target still presents an opportunity for investors. The potential upside remains, prompting Piper Sandler to continue recommending Biogen as a viable investment option.
Biogen's stock performance and investor sentiment will likely be influenced by the ongoing developments and reception of Leqembi within the healthcare sector. The company's ability to address the concerns raised by the medical community and improve the drug's uptake dynamics will be critical in shaping its future revenue streams and market valuation.
In other recent news, Biogen Inc (NASDAQ:BIIB). has completed the acquisition of Human Immunology Biosciences (HI-Bio), integrating HI-Bio's felzartamab, a promising late-stage therapeutic candidate, into Biogen's immunology pipeline.
The financial terms remain undisclosed. Biogen, in partnership with Eisai Co (OTC:ESAIY) Ltd, has also launched their Alzheimer's treatment, Leqembi, in China, marking the drug's introduction in its third market. RBC Capital maintains a positive outlook on Biogen, keeping a price target of $317.00, linked to the potential success of Leqembi.
Stifel also reaffirmed a Buy rating with a $275.00 price target for Biogen, following the FDA's Advisory Committee meeting discussing another Biogen treatment, donanemab. These are recent developments in the company's pursuit to advance patient care.
InvestingPro Insights
As Piper Sandler revises its outlook on Biogen (NASDAQ:BIIB), it's worth noting that Biogen is recognized as a prominent player in the Biotechnology industry, with a market capitalization of $34.48 billion. The company's stock has demonstrated strong return over the last three months, with a 19.49% price total return, showcasing resilience despite market fluctuations. Additionally, Biogen's liquid assets have been reported to exceed its short-term obligations, providing the company with a solid financial footing to navigate the challenges surrounding its Alzheimer's drug, Leqembi.
Investors considering Biogen should be aware that analysts predict the company will be profitable this year, with a robust gross profit margin of 75.49% over the last twelve months as of Q1 2024. The InvestingPro Tips also highlight that Biogen's stock price often moves in the opposite direction of the market, which could be a strategic consideration for portfolio diversification. For those looking to delve deeper into Biogen's financials and stock performance, InvestingPro offers additional tips and insights. Use coupon code PRONEWS24 to get up to 10% off a yearly Pro and a yearly or biyearly Pro+ subscription, and discover the 5 additional InvestingPro Tips available for Biogen at Investing.com/pro/BIIB.
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