3 analysts upgrade Biogen after Alzheimer's drug success, say big gains are ahead for the stock

Published Wed, Sep 28 20228:08 AM EDTUpdated Wed, Sep 28 202211:19 AM EDT

Three analysts upgraded Biogen after the biotech company reported "best-case scenario" results from a late phase in a study of a potential Alzheimer's drug. Biogen's results from Phase 3 of the ABeta-targeting drug study prompted enthusiasm from BMO along with analysts from Baird and Mizuho, who see the results as leading to FDA approval, government reimbursement and limited competition. The results essentially showed the drug from Biogen slowed the decline of Alzheimer's patients. Volunteers on the medication, called lecanemab, saw a reduction in cognitive decline of about 27%. Biogen shares shot up about 35% on the news. "We think the top-line data is as strong as can be, with high statistical significance across all endpoints," said BMO analyst Evan David Seigerman. "Data doesn't get much cleaner than this in biotech." Seigerman was the most bullish on Biogen, saying he "can no longer sit on the sidelines" after seeing phase three results. He said it is "highly unlikely that Medicare would be able to withhold coverage for a drug that has been shown to slow decline in a large, randomized, clinical trial." He upped his Biogen price target to $360 per share, 82% above where the stock closed Tuesday. The analyst also upgraded the company to outperform from market perform. A homerun Meanwhile, Mizuho analyst Salim Syed upgraded Biogen to buy from neutral, raising the price target 30% to $270 from $207. The new target implies upside of 36.5% from Tuesday's close. Syed said the results were in line with what would be considered an investor "win," noting that this is "likely enough for regulatory approval." Baird analyst Brian Skorney also sees big gains ahead for Biogen, upgrading the stock to outperform and raising his price target to $340 from $224. The new price target is 71.9% above Tuesday's close. Skorney said this is "the first clearly positive study" for this type of Alzheimer's study. He added that '"As long time bears on the ABeta programs, we think there needs to be some concession here," Skorney said. "In the scheme of the disease, this isn't an amazing outcome, but relative to all the data sets that have come before, this is a homerun." — CNBC's Michael Bloom contributed to this report.