December 21, 2016
By Alex Keown, BioSpace.com Breaking News Staff
NEW YORK – Long-term investors in Biogen have seen a roller coaster ride throughout 2016 as the stock has seen highs of up to a high of $330.11 per share this year, but also lows of $224.60. There have been peaks and valleys for Biogen shares throughout the year.
While 2017 may have been disappointing for Biogen investors, analyst Keith Speights believes 2017 will be a much stronger year, particularly with Wall Street analysts projecting a potential upside of over 18 percent for the stock. Writing in The Motley Fool, Speights outlines three reasons why the stock should soar.
1. Product launches
First, Speight points out that Biogen and its partner Ionis Pharmaceuticals hope to launch spinal muscular atrophy (SMA) drug Spinraza in early 2017. Spinraza is an antisense oligonucleotide (ASO) that is designed to alter the splicing of SMN2, a gene that is nearly identical to SMN1. The jointly developed drug could generate annual revenues of up to $2 billion. Being an orphan drug for a rare, but fatal disease, if Spinraza is approved, it could come with a hefty price tag. The U.S. Food and Drug Administration accepted the New Drug Application for Spinraza and has it on a fast track designation and priority review. Spinraza has the potential for the broadest possible label expansion for SMA Types 1, 2, and 3 if it is approved.
2. Spin off
Biogen is set to launch its hemophilia spin-off company Bioverativ Inc. in early 2017. Bioverativ will focus on the discovery, research, development and commercialization of treatments for hemophilia and other blood disorders. The company will launch with two approved hemophilia drugs, Alprolix and Electate, which generated $500 million in revenue in 2015. Bioverativ will be helmed by John Cox, Biogen’s former executive vice president of pharmaceutical operations and technology. For investors, this means they will not only hold shares of Biogen, but will have shares of a new public company as well. With the potential for growth, Speights pegged this as a positive for investors.
3. Pipeline progress
Positive news about Biogen’s experimental therapies will certainly benefit shareholders. Two experimental drugs Speights pegged as potential areas of growth are BIIB074 in treating chronic facial pain disorder trigeminal neuralgia and human monoclonal antibody BG00011 in treating ideopathic pulmonary fibrosis. Both drugs are expected to wrap up early and mid-stage studies in 2017. Biogen is also expected to finish another study of its multiple sclerosis drug, Tysabri in the summer. The company is studying the drug’s effects on ischemic stroke. While these drugs look promising, Speights was careful to note that there are risks with experimental drugs and that will certainly have an effect on stock prices.
Earlier this month, Biogen investors breathed a sigh of relief on positive news for aducanumab, the company’s experimental drug targeting amyloid plaque in the treatment of Alzheimer’s disease. While the mid-stage study was positive, late-stage data will not be available for a few years and that is where many Alzheimer’s drugs have failed to meet their goals.
Biogen will also start 2017 with a new chief executive officer. Earlier this week the company announced Michel Vounatsos, Biogen’s chief commercial officer, will assume the company’s top spot. He will assume control on Jan. 6. Current CEO George Scangos announced his intention to step down from the role earlier this year.
