Biogen (NASDAQ:BIIB) shares were initiated with an Overweight rating and $311 per share price target by Cantor Fitzgerald analysts in a note Wednesday.
Analysts' bullish stance points to three key value drivers for the biotech giant: Leqembi's Alzheimer's potential, Skyclarys' rapid ascent, and improved oversight and profitability.
Analysts noted that Leqembi's launch has disappointed nearly all expectations, but they stated that in biotech the launch doesn't always predict the landing.
"Physicians are positively inclined toward Leqembi's profile and forecast substantially higher utilization as barriers to a novel treatment paradigm are overcome (reimbursement, screening, monitoring). Physicians also view the availability of a SubQ formulation as a boost to longer-term adoption," analysts wrote. "We think Leqembi is capable of achieving reset expectations."
The Cantor analysts explained that Biogen gained Skyclarys in September through the $7.2 billion acquisition of Reata. "The drug has had a strong U.S. launch in Friedreich's Ataxia and last week's positive CHMP recommendation places it on track to become the first drug approved for this indication globally," they wrote."While Skyclarys is far from a cure, we expect it to quickly become standard-of-care in a severe patient population with no other options."
Finally, Cantor said Biogen's legacy businesses have been in decline for several years. However, "restructuring initiatives designed to reduce net spending by ~$800M in 2025 are underway," and Cantor believes "Biogen's base business is associated with favorable durability and can contribute meaningfully to cash flow."