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Stock Analyst Update

Biogen Fair Value Estimate Rises on Strong Alzheimer’s Treatment Data

Biogen’s neurology-focused portfolio and pipeline continue to support a wide economic moat.

We’ve raised our Biogen (BIIB) fair value estimate to $330 from $305 following lecanemab’s strong phase 3 data in Alzheimer’s disease. We had already incorporated a 50% probability of roughly $5 billion in 2031 sales for lecanemab (profits split equally with partner Eisai), and with this data, we’ve increased that probability to 90%. We expect accelerated approval of the drug in January 2023, with full approval and strong reimbursement from private payers and Medicare by the end of 2023. Biogen’s neurology-focused portfolio and pipeline continue to support a wide economic moat.

Given the strength of the data, we expect lecanemab could be one of three new Alzheimer’s drugs to potentially reach the market over the next couple of years, followed by Roche’s gantenerumab (phase 3 data expected in November) and Lilly’s donanemab (phase 3 data in mid-2023). We think there is room for the global market for novel Alzheimer’s treatments to exceed $15 billion by 2031, assuming roughly 10% of diagnosed patients in major markets receive treatment, with a U.S. price tag around $30,000 annually. This pricing is roughly in line with Biogen’s lowered price tag for Aduhelm, which had a much weaker dataset to support its accelerated approval (based on plaque lowering).