Biogen raised to Outperform at RBC on potential upside in Alzheimer’s
travellinglight/iStock via Getty Images

Biogen (BIIB
+2.4%) shares are trading higher in morning hours Thursday after RBC Capital Markets upgraded the battered Alzheimerâs drug developer, citing an improving risk-reward setup following a survey of physicians.
The analysts led by Brian Abrahams argue that Biogen (NASDAQ:BIIB) has lost 50% from its peak during the U.S. approval of Aduhelm, developed by the company in partnership with Eisai (OTCPK:ESALY) for Alzheimerâs disease.
After removing the AD indication from the model and with conservative estimates for other marketed assets and pipeline programs, the firm sees only about 11% downside to company shares even as its management implements restructuring initiatives.
Upgrading the stock to Outperform from Sector Perform, the team raises the price target to $248 from $227 per share to imply a premium of ~19% to the last close.
Citing a survey involving AD doctors, the analysts note that âthere remains surprisingly solid appetite for use of beta-amyloid antibodies,â despite mixed data and recent negative headlines.
The approval of Aduhelm in June caused a controversy among the medical community. In January, ahead of a National Coverage Determination (NCD) for the treatment, the Centers for Medicare & Medicaid Services (CMS) proposed to severely restrict access to Aduhelm and other similar Alzheimerâs drugs.
However, the team indicates âpotential for considerable revenue and stock appreciationâ for the company subject to a positive development this year on the NCD front or lecanemab, another AD therapy being developed by Biogen and Eisai.