Summary
- Biogen's current product lineup is beginning to show its age, and a fresh injection of novel products may be necessary to jumpstart top-line revenue growth.
- Spinraza is a notable step in the right direction, but we fear new gene-editing therapies may disrupt Spinraza, thus depriving Biogen an avenue of growth.
- Biogen is committed to bringing forth a new treatment for Alzheimer's, but the goal of a viable treatment may be elusive. We're optimistic, however.
- The company reported positive trial results at the 18-month mark on a key Alzheimer's product, but the same compound missed its primary endpoint at the 12-month mark, raising concerns on how valid the results truly are.
- Thanks in large part to the stellar share-price jump driven by the perceived positive data read in Alzheimer's, Biogen has now cut through our $313 fair value estimate to the upside.
By Alexander J. Poulos
We closely follow the progress of the clinical pipeline of companies in the pharma/biotech sector. Unlike other less product-driven industries, the pharma/biotech sector can experience wide swings in operating performance as a result of the lapsing of patent protection on key drugs, underscoring the importance of innovation to replace aging products. Biogen (BIIB) may have hit a home run in the critical field of Alzheimer's, an area of tremendous untapped need.
