One research note from Tuesday suggest that the great gains from Biogen Idec are done. With shares around $152.65 now, Canaccord Genuity has initiated the MS-leader in biotech with a Hold rating. If you consider that the price target objective is only $144 for the next 12-months, that Hold rating may sound like more of a Sell rating. Canaccord Genuity said that it expects a slower than consensus BG-12 launch, but ultimately it does see blockbuster potential. The firm also noted:
- Hemophilia franchise potential is large given data so far, but await full Phase 3 data for safety, efficacy detail. Top-line A-LONG and B-LONG trial data were positive, suggesting BIIB’s long-lasting Fc factors could significantly reduce infusion frequency in hemophilia A and B patients. With top-line data only, however, we are tempering our enthusiasm as we await full details to flesh out the drugs’ safety profile and clinical potential.
- We see low likelihood of EMPOWER success given lack of iron-clad Phase 2 data and difficulty in ALS drug development. We believe the complexity of ALS, EMPOWER trial design and noisiness of Phase 2 data together reduce the trial’s chance of success. Given the lack of ASL treatments, however, we think positive Phase 3 data would provide meaningful upside.
- Pipeline: daclizumab, anti-LINGO, others could create long-term value. While we expect weakness on BG-12 launch, we think BIIB’s pipeline will create significant long-term value. For investors with a 12-month+ horizon, we think BG-12-driven weakness could be a good entry point.
As far as what this means with a current price of $152.65, the 52-week trading range is $109.22 to $157.18. Thomson Reuters has a consensus price target of about $159.23, although we would note that the street-high price target is $184 on Biogen Idec.
JON C. OGG
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