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Biogen's Multiple Sclerosis Franchise to Drive Growth in 2017

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We issued an updated research report on Biogen Inc. (BIIB - Free Report) on Jan 16.
The leading biotechnological company holds a strong position in the multiple sclerosis (MS) market with a wide range of products including Avonex, Tysabri, Tecfidera and Plegridy.

Biogen’s share price has gained 4.2% in the past one year compared with Zacks classified Medical-Biomedical and Genetics industry’s fall of 11.3%, backed by consistently strong earnings results and regular positive news flow along with regulatory updates.

The company remains focussed on increasing its efficiency and hence started a restructuring program.  As part of which, Biogen is going to focus on the development of certain pipeline candidates and will be terminating some programs as well as certain activities in immunology and fibrosis research. The company has also decided to spin-off its hemophilia business by Feb 1 and the new company will be called Bioverativ Inc. This spin-off of will allow Biogen to focus on its neurology segment, which is its key area of expertise.

Biogen’s promising pipeline candidates include aducanumab (Alzheimer's disease); and BIIB074 (trigeminal neuralgia and sciatica ongoing). In Dec 2016, Biogen and partner Ionis Pharmaceuticals, Inc. (IONS - Free Report) got a boost with the FDA approving their spinal muscular atrophy (SMA) treatment Spinraza.

Spinraza has been approved to treat a broad range of SMA patients. With the drug being the first treatment to be approved for SMA, a leading genetic cause of death in infants and toddlers that is marked by progressive, debilitating muscle weakness, its market potential is huge.

Biogen also has a few partnerships to enhance its pipeline with Eisai Co., Ltd. for disease-modifying treatments for Alzheimer’s – E2609 and BAN2401 and with Applied Genetic Technologies Corp. for gene-based therapies for multiple ophthalmic diseases.  Biogen is also working with Samsung BioLogics to bring new biosimilars to market. Samsung Bioepis, the joint venture between the two companies has already launched a couple of biosimilars in the EU – Flixabi (a biosimilar referencing Remicade) and Benepali (a biosimilar referencing Enbrel) and currently has a Humira biosimilar, SB5, under review in the EU.

However, Biogen faces its own set of challenges. Interferon products are under pressure with patients continuing to shift to oral therapies. In the past, the emrgence of a PML cases associated with the use of Tysabri and Tecfidera have led to a slowdown in sales of these MS drugs. The emergence of additional PML cases for Tysabri/Tecfidera would weigh heavily on the stock as it would pipeline setbacks.

Nevertheless, significant news flow is expected in 2017, which would help it retain investors’ interest in the stock.

Zacks Rank and Key Pick

Biogen currently holds a Zacks Rank #2 (Buy). Another better-ranked stocks in the health care sector includes Anika Therapeutics Inc. (ANIK - Free Report) which carries a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Anika’s earnings estimates for 2016 and 2017 were up 3.9% and 0.5% respectively over the last 60 days. The company recorded a positive earnings surprise in each of the last four quarters, the average being 33.14%. Its share price was up 31.3% in the past one year.

Zacks' Top 10 Stocks for 2017

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Biogen Inc. (BIIB) - free report >>

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