Biogen: Market analysts express skepticism regarding sluggish Leqembi launch

Biogen's shares suffered a setback of about 3% on Thursday after Morgan Stanley analysts downgraded the stock from 'Overweight' to 'Equal Weight' and lowered the price target from $285 to $204. The reason for this adjustment lies in the disappointing market launch of Biogen's Alzheimer's drug Leqembi. Consequently, Morgan Stanley halved its revenue expectations for Leqembi from 2024 onwards and now forecasts global sales of $2.4 billion in 2033 instead of the previous $5.6 billion. Additionally, the growth forecast for the years 2025 to 2030 was reduced from 4% to 1%. Analysts indicated that they had underestimated initial challenges in reimbursement and logistics, in addition to delays in the subcutaneous formulation of Leqembi, which offers more convenient dosing. A negative opinion from the Committee for Medicinal Products for Human Use (CHMP) further impaired the outlook. Furthermore, short-term challenges may arise from the launch of Eli Lilly's Kisunla. Although the analysts highlight potential upsides, including Leqembi's preventive potential in the AHEAD-3-45 Phase 3 trial and progress with BIIB080 and Felzartamab, they do not see a clear path upward for the stock in the short term. Biogen's management emphasizes positive developments, such as the expansion of Leqembi prescribers and accelerated market growth in the U.S. In Japan, Leqembi's revenue nearly doubled quarter-on-quarter. Regulatory decisions for the subcutaneous formulation are expected in mid-2025 and the first quarter of 2026. Nevertheless, Morgan Stanley sees low chances for EMA approval following this year's CHMP reevaluation. Risks exist due to increased competition and potential pipeline issues.