Biogen (BIIB) has been in the headlines after FDA approved the company’s Alzheimer’s disease drug Aduhelm (aducanumab), in a controversial decision that went against the advisory committee’s recommendation. (See Biogen stock chart on TipRanks)
Aduhelm fills a significant gap in the market, as there are over 6 million Alzheimer’s patients in the United States. But the question that lies ahead is: will the drug be able to gather momentum amidst the fierce criticism?
Jefferies’ Michael Yee sounds optimistic about Aduhelm’s future uptake after meeting with Biogen’s executives. He said that the “early indicators look good” and the demand for the drug remains strong.
According to the company, there are a few clinical sites where there is a high demand for a new PET/CSF test, which is required for doctors to write scripts authorizing the use of Aduhelm. That, in turn, indicates that the drug is in high demand.
However, the drug has been approved by only 325 clinical sites, while others are still considering adding the drug. As a result of the slower-than-expected acceptance of the medicine by the sites, the analyst’s predictions for 2021 have been reduced.
Nevertheless, the analyst believes that a Medicare National Coverage Determination (NCD) ruling would bring in more “consistency” to the whole process and override “regional decisions.” However, if the judgment turns out to be Coverage with Evidence Development, or CED, it is possible that Aduhelm will be limited to large trial centers, creating social inequities.
Generally, NCDs are launched by the Centers for Medicare and Medicaid Services (CMS) with an intention to set national standards for Medicare’s coverage of drugs such as Aduhelm.
Given his optimism, Yee reiterated a Buy rating on the stock and a price target of $500. This target reflects a potential 12-month upside of 49.7%. The biotechnology company has gained around 20% over the past year.
Wall Street’s Take on BIIB
On TipRanks, Biogen has an analyst rating consensus of Moderate Buy, based on 15 Buy ratings and 13 Hold ratings assigned in the last three months.
As for price targets, the average BIIB price target is $429.13, reflecting a potential 12-month upside of 28.5% from current levels.
Disclaimer: The opinions expressed in this article are solely those of the featured analyst. The content is intended to be used for informational purposes only. It is very important to do your analysis before making any investment.
