Biogen slips as analysts react to final Medicare decision on Alzheimer’s therapy
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Biogen (NASDAQ:BIIB) shares are trading lower in the pre-market Friday on the Medicare decision to restrict the coverage for FDA-approved Alzheimerâs therapies that target Amyloid proteins in the brain. The decision affects Aduhelm, a controversially approved Alzheimerâs therapy developed by Biogen (BIIB) and Eisai (OTCPK:ESALY).
Following the news, Needham has slashed the price target for Biogen (BIIB) by ~10% to $262 per share to imply a premium of ~27% to the last close.
The analyst Ami Fadia argues that the decision would limit Aduhelm coverage to 1,000s range, indicating a significant restriction on its potential.
Medicare first announced the proposal in January, and the analyst does not expect âa significant downsideâ to Biogen (BIIB) shares on the final decision as she notes that the stock already reflects the negative decision. 
Commenting on the news, BTIG analysts led by Thomas Shrader, highlight its impact on Biogen (BIIB) which obtained FDA approval for Aduhelm under FDAâs accelerated pathway last year.
"The decision is highly negative for aducanumab and no better than neutral for Biogen (BIIB)," the team added as they reiterated the Neutral rating on the stock.
The final decision is a small improvement for the AÎ² field with antibodies that receive traditional FDA approval still being reimbursed under "coverage with evidence development," they wrote, seeing positives for drugs that could enter the market with full FDA approval.
The prospects are cloudy for Lecanemab, the second antibody therapy developed by Biogen (BIIB) and Eisai (ESALY), for Alzheimerâs as its Phase 3 data, expected in 2H 2022 âare currently slated to support accelerated approval,â the analysts wrote.
While the next data readout for Donanemab, a similar Alzheimerâs therapy being developed by Eli Lilly (NYSE:LLY), would support an accelerated approval, the team note that the pharma giant anticipates âvery low salesâ for the Amyloid targeting antibody prior to its full approval.
Since the FDA approval of Aduhelm in June, Biogen (BIIB) has struggled to improve Aduhelm uptake, and its share price has lost more than 40% to underperform the broader market, as shown in this graph.