It doesn’t really matter how the stock market performs when a biotech company presents the results of a drug in development. The market might be taking a sound beating but that will matter little when the results are overwhelmingly positive.
Which brings us to Biogen (BIIB). Shares skyrocketed 40% in Wednesday’s session after the pharma giant – along with partner Eisai – announced results from a late-stage trial which showed its drug targeting the notoriously difficult to treat Alzheimer’s disease, significantly slowed its progress.
Specifically, top-line results from the Phase III CLARITY AD study of lecanemab for early Alzheimer’s disease showed that after 18 months of treatment, lecanemab lowered the clinical decline on the global cognitive and functional scale (CDR-SB) by 27% vs. the placebo, thus meeting the trial’s primary endpoint. This makes it the first therapy to halt progression of the disease in a large-scale trial. Moreover, key secondary endpoints were also met. By the end of 1Q23, the company anticipates filing for full approval.
The results could hardly have been any better, says Cowen’s Phil Nadeau.
“The top-line data from lecanemab’s CLARITY-AD trial released by Biogen/Eisai tonight appear to be close to the best case scenario, in our opinion,” the 5-star analyst opined. “While the market has been skeptical of lecanemab’s prospects, the trial appears to be a resounding success. The results confirm the 26% slowing of cognitive decline produced by lecanemab at 18 months in its Phase IIb. The trial also achieved all key secondary endpoints and thus mark a watershed moment for the Alzheimer’s field as they are the first definitive proof that reducing beta amyloid can slow the progression of Alzheimer’s disease.”
Unsurprisingly, then, Nadeau reiterated an Outperform (i.e., Buy) rating along with a $270 price target, which, following the surge, now suggests shares are trading at their fair value. It should be noted, however, that Nadeau’s target is based on the drug achieving just 2% penetration of U.S.’s early AD market (generating sales of $1 billion), a figure the analyst thinks could now be “meaningfully conservative.” (To watch Nadeau’s track record, click here)
Looking at the consensus breakdown, based on 15 Buys vs. 9 Holds, the analyst consensus rates the stock a Moderate Buy. That said, the shares’ surge has taken them beyond the $258.35 average target. (See Biogen stock forecast on TipRanks)
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Disclaimer: The opinions expressed in this article are solely those of the featured analysts. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.