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On Tuesday, Truist Securities adjusted its price target for Biogen (NASDAQ:BIIB) shares, reducing it to $199 from a previous $210, while keeping a Buy rating on the stock. Currently trading at $119.12, significantly below its 52-week high of $238, Biogen maintains strong fundamentals with a P/E ratio of 10.61. The revision follows Biogen’s recent collaboration with Stoke Therapeutics (NASDAQ:STOK) to develop and commercialize zorevunersen, aimed at treating Dravet Syndrome. According to InvestingPro analysis, the stock appears undervalued based on its Fair Value metrics.
Biogen, with its robust market capitalization of $17.44 billion and impressive gross profit margin of 76.12%, has agreed to pay Stoke Therapeutics $165 million upfront, with potential future payments of up to $385 million in milestones and royalties, as well as covering 30% of the development costs. In return, Biogen will hold exclusive commercialization rights outside of the U.S., Canada, and Mexico, which will be retained by Stoke. The pivotal Phase 3 EMPEROR study for zorevunersen is set to begin in the second quarter of 2025 and is expected to have results by the second half of 2027.
The adjustment of the price target comes after the analyst took into account management’s comments regarding the slower uptake of Skyclarys in the U.S. market. Skyclarys’ growth has been more gradual than expected, particularly in academic centers where it has been prescribed, and it is anticipated that it will take time for community patients to be prescribed the drug. Consequently, the peak sales forecast for Skyclarys has been lowered to $1.7 billion by the year 2035, down from the prior estimate of $1.9 billion. For deeper insights into Biogen’s financial health and growth potential, InvestingPro subscribers can access comprehensive analysis and 7 additional key ProTips about the company’s performance.
The financial model for Biogen has been updated to reflect both the Stoke collaboration and the revised expectations for Skyclarys sales. The new model projects revenues and EPS for the years 2025, 2026, and 2027 at $9.1 billion, $9.2 billion, and $9.5 billion, respectively, with EPS figures of $15.10, $14.02, and $14.85 for the same years. These figures are adjusted down from the previous forecasts of $9.3 billion in revenue and EPS of $16.01, $14.81, and $15.85. Despite these adjustments, Truist Securities maintains its Buy rating on Biogen stock, with a revised price target of $199. The company maintains a strong free cash flow yield and healthy financial metrics, supporting its position as a prominent player in the biotechnology industry.
In other recent news, Biogen has received significant attention due to a variety of developments. The U.S. Food and Drug Administration granted Fast Track designation to Biogen’s investigational drug BIIB080 for Alzheimer’s disease, highlighting its potential to address unmet medical needs in this area. This comes as Biogen is exploring its efficacy in a global Phase 2 study. Meanwhile, RBC Capital Markets adjusted Biogen’s financial outlook, reducing the price target to $221 while maintaining an Outperform rating. RBC noted that Biogen’s revenue is expected to align closely with consensus estimates, with Spinraza outperforming expectations.
In contrast, HSBC downgraded Biogen from "Buy" to "Hold" and significantly reduced the price target to $118, citing concerns over the company’s growth drivers, particularly Leqembi and Skyclarys. UBS also adjusted its price target for Biogen, lowering it to $134 from $157 but maintaining a Neutral rating. This reflects a broader market volatility impacting the biopharmaceutical sector. BTIG kept a Neutral rating on Biogen, noting a strategic shift towards R&D collaborations, such as the partnership with Stoke Therapeutics. These developments illustrate Biogen’s ongoing efforts to navigate challenges and leverage strategic partnerships in its pursuit of growth and innovation.
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