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Biogen Inc BIIB

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Biogen Sees MS Resiliency, but Disappointing Aduhelm Launch in 3Q; Maintaining Our FVE

Karen Andersen, CFA Sector Strategist

Analyst Note

| Karen Andersen, CFA |

We're maintaining our $391 per share fair value estimate for Biogen following third-quarter results reflecting several expected headwinds, including generic/biosimilar pressure on MS drug Tecfidera/oncology drug Rituxan, lower sales for SMA therapy Spinraza, and a disappointing launch for new Alzheimer's drug Aduhelm. However, management raised top- and bottom-line guidance for the full year and is heavily spending its cash flows on distributions to shareholders, in the form of share repurchases. We think shares still look undervalued, and that Biogen's progress with its neurology pipeline will continue to secure a wide moat. We expect the firm to return to double-digit growth by 2023, as the launch of Aduhelm (and potentially the launch of phase 3 amyloid antibody lecanemab) and other neurology pipeline candidates drive sales, and as generic and biosimilar headwinds abate.

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Company Profile

Business Description

Biogen and Idec merged in 2003, combining forces to market Biogen's multiple sclerosis drug Avonex and Idec's cancer drug Rituxan. Today, Rituxan and next-generation antibody Gazyva are marketed via a collaboration with Roche. Biogen also markets novel MS drugs Plegridy, Tysabri, Tecfidera, and Vumerity. In Japan, Biogen's MS portfolio is co-promoted by Eisai. Hemophilia therapies Eloctate and Alprolix (partnered with SOBI) were spun off as part of Bioverativ in 2017. Biogen has several drug candidates in phase 3 trials in neurology and neurodegenerative diseases and has launched Spinraza with partner Ionis. Aduhelm was approved as the firm's first Alzheimer's disease therapy in June 2021.

225 Binney Street
Cambridge, MA, 02142
T +1 617 679-2000
Sector Healthcare
Industry Drug Manufacturers - General
Most Recent Earnings Sep 30, 2021
Fiscal Year End Dec 31, 2021
Stock Type Slow Growth
Employees 9,100