Biogen Earnings: Shares Undervalued as Cost Controls Materialize and New Launches Accelerate

We’re maintaining our $303 fair value estimate for Biogen following mixed results in the second quarter. Biogen’s flat second-quarter revenue reflected a combination of generic and biosimilar headwinds on older multiple sclerosis drugs but also a strong launch of rare-disease drug Skyclarys, and cost controls helped secure 30% non-GAAP operating income growth (43% growth including the proceeds from the sale of a priority review voucher). We still think Biogen has a long road to recovery ahead of it, particularly given the slow launches of Alzheimer’s drug Leqembi and postpartum depression drug Zurzuvae.