On Wednesday, Goldman Sachs (NYSE:GS) reiterated its Buy rating on Biogen (NASDAQ:BIIB) with a maintained price target of $290.00. The firm's analysis acknowledged Biogen's third-quarter revenue met expectations, helped by the performance of Leqembi and despite Skyclarys not meeting forecasts. Cost-saving measures led to a higher earnings per share (EPS).
Biogen's recent launch of Leqembi, a treatment for Alzheimer's disease, has faced hurdles due to infrastructure and logistical challenges. Nevertheless, Goldman Sachs expects a steady increase in the drug's adoption. The firm is closely observing the potential impact of upcoming 2025 approvals and the market entry of competitor Eli Lilly (NYSE:LLY)'s Kisunla on Biogen's growth.
The analyst noted Skyclarys' expansion into new geographic markets as a positive development, though they cautioned that future sales might fluctuate due to the intricacies of reimbursement processes. The firm also pointed out that business development and a robust mid-to-late stage pipeline will be key for Biogen to counterbalance declining revenue from its legacy products.
Goldman Sachs highlighted several promising treatments in Biogen's pipeline, including felzartamab for immune-mediated diseases, dapirolizumab for lupus in partnership with UCB, and BIIB080 for tauopathies in collaboration with Ionis Pharmaceuticals (NASDAQ:IONS). Detailed Phase 3 data for dapirolizumab is expected to be presented at the American College of Rheumatology conference scheduled for November 14-19, with subsequent trials to begin shortly.
In conclusion, Goldman Sachs expressed optimism about Biogen's trajectory but noted that a significant growth inflection is necessary. The firm is monitoring Biogen's business development activities and the execution of its pipeline, which management estimates could generate $9-14 billion in revenue, compared to the current base business of approximately $7.5 billion.
In other recent news, Biogen Inc (NASDAQ:BIIB). has made significant strides in its operations and strategic initiatives. The company has raised its annual profit forecast, attributing this growth to the launch of new treatments and strategic cost reductions. Biogen's Alzheimer's Disease drug, Leqembi, has seen a gradual increase in U.S. sales, and the company's new treatments such as Zurzuvae and Qalsody have exceeded sales expectations.
Biogen has also recently appointed Robin Kramer as the new CFO, succeeding Michael McDonnell upon his retirement. Truist Securities has reiterated its Buy rating on Biogen shares, maintaining a price target of $302.00, while BMO Capital Markets has maintained its Outperform rating and a price target of $230.00. Biogen has announced its participation in the upcoming American Society of Nephrology's Kidney Week 2024, where it will present new findings from the clinical development program of felzartamab.
InvestingPro Insights
Adding to Goldman Sachs' analysis, recent InvestingPro data provides further context to Biogen's financial position. The company's market capitalization stands at $26.39 billion, with a P/E ratio of 22.76. Notably, Biogen's revenue for the last twelve months as of Q2 2024 was $9.67 billion, with a slight revenue decline of 3.0% over the same period.
InvestingPro Tips highlight Biogen's strengths and challenges. The company is recognized as a "Prominent player in the Biotechnology industry," which aligns with Goldman Sachs' focus on Biogen's pipeline and new drug launches. Additionally, Biogen's stock "generally trades with low price volatility," potentially offering some stability for investors during the company's transition period.
It's worth noting that Biogen is "Trading near 52-week low," which could present an opportunity for investors who share Goldman Sachs' optimistic outlook. This is particularly relevant given that analysts predict the company will remain profitable this year, as indicated by another InvestingPro Tip.
For readers interested in a more comprehensive analysis, InvestingPro offers additional tips and insights that could further inform investment decisions regarding Biogen.
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