A U.S. Food and Drug Administration committee is likely to give an unfavorable review next month for a key Biogen (BIIB) Alzheimer’s treatment, an analyst said in a research report to clients on Monday, an action that could weigh on BIIB stock. It comes as BIIB earnings are due this week.
The drug’s chances at approval stand at “just under a coin flip,” RBC Capital Markets analyst Dr. Brian Abrahams said in a note to clients. He lowered his price target on BIIB stock to 268 from 281. He also rates shares as sector perform.
RBC hosted a mock advisory committee Friday that reviewed the data on the Biogen drug therapy, aducanumab. The panel voted 6-2 against approval. The panel of experienced medical practitioners found “that the existing data does not establish the efficacy of aducanumab for patients with early-stage AD (Alzheimer’s),” Abrahams wrote.
However, he also wrote that “recent expedited review actions suggest FDA could still be open to ultimate approval.” It’s also possible the FDA advisory committee will give a favorable reading on aducanumab at its meeting set for Nov. 6. The committee’s actions are not binding.
Biogen maintains high hopes for the treatment. It says aducanumab would be the first disease-modifying Alzheimer’s treatment on the market. It’s been 17 years since the FDA last reviewed an application for a new Alzheimer’s treatment.
Cambridge, Mass.-based Biogen is the No. 1 maker of multiple sclerosis drugs, but its MS franchise faces more competition from generic-drug makers.
BIIB Stock Awaits Earnings
BIIB earnings for the third quarter are due early Wednesday. Analysts say shares of BIIB stock could be affected by sales of No. 1 drug Tecfidera. The MS drug faces more generic rivals. In the second quarter, Tecfidera sales edged up 3% from the second quarter of 2019, to $1.18 billion.
Analysts polled by FactSet expect Biogen to report a 12% decline in adjusted earnings per share for the third quarter. That’s on a 7% drop in sales, Biogen’s first year-over-year sales decline in at least five years. It’s also its first earnings drop since second-quarter 2017.
“We expect acute focus on Tecfidera given evidence of significant erosion due to generics,” BofA Securities analyst Geoff Meacham wrote in a recent note to clients. At that time, he lowered his price target on BIIB stock to 235 from 255.
BIIB stock sports a Composite Rating of 80. That puts it in the top 20% of all stocks based a broad range of factors. Besides stock price action, the factors include earnings and sales growth.
For the year, BIIB stock has slipped 6%. In early trading in the stock market today, BIIB stock edged lower 0.6% to 278.
Follow Michael Krey on Twitter at @MichaelKrey.
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