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Biogen (BIIB): Deutsche Bank Comments on Recent Weakness And Compares it to Celgene (CELG)

October 22, 2014 10:52 AM EDT
Get Alerts BIIB Hot Sheet
Price: $219.40 +0.04%

Rating Summary:
    29 Buy, 13 Hold, 0 Sell

Rating Trend: Down Down

Today's Overall Ratings:
    Up: 20 | Down: 14 | New: 22
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Deutsche Bank maintained a Buy rating on Biogen (NASDAQ: BIIB) with a price target of $430. Analyst Robyn Karnauskas commented on recent weakness and compared the stock to Celgene (NASDAQ: CELG). Overall, she is positive on both stocks.

"Biogen is trading weak post earnings due to 1) slower sequential revenue growth and 2) One PML case with Tecfidera disclosed on today’s call. While we note that there is a good risk/reward into the pipeline events, we believe investors rotating out of the stock due to 1) lack of catalysts through year end, 2) Tecfidera IP concerns and 3) slowing sequential growth. Investors always compare CELG and Biogen due to similar size and similar growth rates but they are now favoring Celgene over Biogen due to near term headline risks," said Karnauskas.

"While we have a buy on both stocks, we like Celgene more for 2015 as we expect settlement on Revlimid IP issue in 2015 which will bring back investors AND their pipeline will begin to emerge. We believe that Celgene’s pipeline is less risky, more validated yet similarly undervalued as Biogen’s pipeline. We see ~30% upside to CELG if we assign 50% probability to pipeline and 60% upside at 100%, continued the analyst. "On the Biogen side, some investors view is as less attractive given (1) IP questions around Tecfidera are emerging, (2) pipeline trial outcomes are very difficult to predict, and (3) most of their big pipeline readouts will have occurred by mid 2015 potentially leaving the company with fewer catalysts."

"The reality in our view is that BOTH stocks could work in 2015, it is just that the probability we place on precise upside is much more difficult for Biogen given its high risk/high reward pipeline," she added. "We think the stock could move $37 on anti lingo in AON, $15-$29 on Alzheimer’s, and $10 on pain in early 2015. Company still expects lingo data in optic neuritis to come early 2015."

For an analyst ratings summary and ratings history on Biogen click here. For more ratings news on Biogen click here.

Shares of Biogen closed at $326.77 yesterday.



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