Morgan Stanley double-upgrades Biogen and says the stock can surge another 30%

Associated Press

  • Morgan Stanley on Monday upgraded Biogen from underweight to overweight – a rare double upgrade – citing compelling risk versus reward in the long-term.
  • The firm also boosted its price target on Biogen to $US357 from $US263. The new target price represents a more than 30% upside from where Biogen traded at Friday’s close.
  • Shares of Biogen gained nearly 5% on Monday.
  • Watch Biogen trade live on Markets Insider.
  • Read more on Business Insider.

Biogen got a rare double upgrade on Monday from Morgan Stanley, which boosted its rating on the company to overweight from underweight citing compelling long-term risk versus reward.

Morgan Stanley also boosted its Biogen price target to $US357 from $US263. The new figure is more than 30% higher than Biogen’s Friday closing price.

Shares of Biogen jumped nearly 5% during intraday trading Monday.

“In the near-term, we believe BIIB is likely to face 10%+ in downside pressure due to multiple at-risk generic launches for multiple sclerosis (MS) drug Tecfidera,” analysts led by Matthew Harrison wrote Monday.

He continued: “However, we expect investors to quickly look past the Tecfidera downside and start to price in higher odds of success for aducanumab, Biogen’s investigational drug which is the first potential disease-modifying therapy for Alzheimer’s disease.”

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Morgan Stanley said that it believes investors are currently pricing in a less than 25% probability of success, but that will increase to at least 50% as the drug moves closer to its potential FDA approval date, expected in March 2021.

Investors who take a “wait-and-see approach” could miss a potential up to 20% move in the near term for Biogen, according to the note.

“While BIIB remains a high-risk/ high-reward stock, we think now is the right time to take the risk,” said Harrison.

Biogen has shed roughly 5% year-to-date.

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