Biogen Inc (BIIB) Is Set to Soar, Thanks to TrumpBy Christine Brown
Stock prices of biotechnology company Biogen Inc. (NASDAQ: BIIB) increased by nearly 17% in a single week, thanks to the Trump presidency as well as some positive drivers reported for the stock. BIIB is currently trading at $319.39, which is much higher than its 50-day SMA of $284.11 and closer to the year’s high of $333.65. Jefferies’ analyst Brian Abrahams had just recently weighed in on the stock with a Hold rating and $310 price target.
One of the main reasons for the recent boost in share prices of the healthcare sector stocks was Trump’s election victory. This was because according to Trump’s policies, the Affordable Care Act (ACA) or Obamacare reforms is expected to be repealed and replaced while Clinton’s major legislation proposed is unlikely to be imposed on drug makers. This acted as major tailwinds for BIIB.
Biogen had recently announced FDA’s acceptance of priority review of its New Drug Application (NDA) for Nusinersen. Nusinersen is proposed as an investigational treatment for spinal muscular atrophy (SMA). The European Medicines Agency (EMA) had also validated BIIB’s Marketing Authorization Application (MAA) for Nusinersen.
Once approved, Nusinersen would be the first therapy for SMA, one of the leading genetic cause of infant mortality and is planned to be marketed under the brand name Spinraza. Spinraza is expected to be launched in the United States by the end of 2016 or 1Q17. BIIB would also be initiating regulatory filings in other countries in the coming months.
According to the latest reports from the Nusinersen Clinical Trial Program, the Phase 3 study evaluating SPINRAZA in later-onset SMA seems to have met the primary endpoint at the interim analysis of CHERISH. The children receiving Spinraza showed significant improvement in motor function compared to those who did not receive treatment and Spinraza also demonstrated a favorable safety profile in the study.
Biogen’s pipeline also includes Aducanumab for the breakthrough treatments for Alzheimer’s disease as well as a solid MS franchise. One of the competitors for BIIB for BACE1 inhibitors for Alzheimer’s disease is Solanezumab from Eli Lilly (LLY). Although LLY’s phase III data for Solanezumab is expected to be announced in December, Brian Abrahams believe that the fundamental impact of EXPEDITION-3 data on BIIB would be more limited than the general expectation.
BIIB had announced its Q3 results on October 26 and reported both EPS beat ($5.19 vs consensus of $4.97) as well as revenue beat ($2.96 billion (+6.5% YoY) vs estimated $2.46 billion).
According to analysts’ recommendations from the past three months of BIIB, the overall consensus rating on the stock is a Moderate Buy. The analysts have an average price target of $345.22, based on data by TipRanks.com. This PT is an upside of 8.16% from the last close.