How Much Eli Lilly (LLY)’s Sola Failure Will Cost Biogen Inc. (NASDAQ:BIIB)?

By Carrie Williams

LLY’s Sola failure costs Biogen Inc. (NASDAQ:BIIB), will it recover?Shares of Biogen Inc. (NASDAQ: BIIB) dropped by 12% in a single day in reaction to the recent selloff of Eli Lilly (LLY) shares, which was triggered by the failure of LLY’s Alzheimer’s drug solanezumab (sola) phase III trial. The shares of BIIB are currently trading at $305.93, which is slightly above its 50-day SMA of $302.81. In a research note released on November 23, analyst Alethia Young from Credit Suisse reiterated a Hold rating and a $322 price target on BIIB. The PT is an upside of 5.25% from the current levels.

Young believes that this decrease in the price of BIIB due to LLY’s decline was not really warranted. This is because unlike LLY’s Sola, Biogen Inc.’s Alzheimer’s treatment, aducanumab (developed in partnership with Eisai) was granted Fast Track designation by FDA recently. The binding sites of Sola and aducanumab are also different, with Aducanumb binding to A-beta oligomers and fibrils while Sola binds to A-beta monomers, which also results in differentiated efficacy for the two treatments. The analyst also expects aducanumab to be more potent based on its Phase 1b data.

However, since Biogen is also studying similar population (MMSE 24-30) as Sola’s Expedition 3 (MMSE 20-26), the key question will be how their data looks in the prodromal. For now, the details presented at CTAD and LLY’s call on Dec 9 is expected to shed further light and to see what happened in prodromal.

A lot is riding on BIIB’s most important pipeline asset Aducanumab, which is currently in phase III development, especially since it forms a chief reason for acquisition interest of BIIB. In case aducanumab proves to be an effective treatment for Alzheimer’s, the resulting market is worth billions of dollars. BBIB’s multiple-sclerosis drug candidate opicinumab (anti-LINGO) had failed to meet the primary or secondary endpoints in its mid-stage trial earlier this month.

Another drug in BIIB’s pipeline includes spinal muscular atrophy (SMA) drug Spinraza (nusinersen) developed in partnership with Ionis, that had met the primary endpoint at the interim analysis of CHERISH. If approved, nusinersen could have huge potential and help kick-start the company’s growth. At any rate, analysts on the Street are expecting BIIB to report earnings of $5.01 per share for the current fiscal quarter.

The analysts’ overall consensus on BIIB is currently a Moderate Buy, with an average PT of $337, according to TipRanks.com. The represents an upside of 11.11% from it’s current share price at $303.31.