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Pro Analysis

Biogen to rally on this next $1 billion blockbuster drug, Citi says

Biogen
Suzanne Kreiter | The Boston Globe | Getty Images

Citi Research on Tuesday upgraded Biogen to buy from hold, predicting a 15 percent rally over the next 12 months as the biotech company gains ground in treating spinal muscular athrophy, a genetic disease that weakens the immune system by affecting the motor nerve cells in the spinal cord.

"The real driver of shares over the next 12-18 [months] is uptake of Spinraza, BIIB's new drug for SMA and our proprietary survey suggests upside to estimates" equity analyst Robyn Karnauskas wrote in a research note.

The analyst believes the Street might be underestimating the potential sales from Spinraza, which has shown positive results during clinical trials.

"We currently model Spinraza gaining 10% penetration in the US and modest uptake in ex-US and get to $390M sales in 2017 (consensus at $200-$300M)," Karnauskas said.