Morningstar

Biogen Fair Value Estimate Rises on Strong Alzheimer’s Treatment Data

Biogen’s neurology-focused portfolio and pipeline continue to support a wide economic moat.

We’ve raised our Biogen (BIIB) fair value estimate to $330 from $305 following lecanemab’s strong phase 3 data in Alzheimer’s disease. We had already incorporated a 50% probability of roughly $5 billion in 2031 sales for lecanemab (profits split equally with partner Eisai), and with this data, we’ve increased that probability to 90%. We expect accelerated approval of the drug in January 2023, with full approval and strong reimbursement from private payers and Medicare by the end of 2023. Biogen’s neurology-focused portfolio and pipeline continue to support a wide economic moat.

Given the strength of the data, we expect lecanemab could be one of three new Alzheimer’s drugs to potentially reach the market over the next couple of years, followed by Roche’s gantenerumab (phase 3 data expected in November) and Lilly’s donanemab (phase 3 data in mid-2023). We think there is room for the global market for novel Alzheimer’s treatments to exceed $15 billion by 2031, assuming roughly 10% of diagnosed patients in major markets receive treatment, with a U.S. price tag around $30,000 annually. This pricing is roughly in line with Biogen’s lowered price tag for Aduhelm, which had a much weaker dataset to support its accelerated approval (based on plaque lowering).

The author or authors do not own shares in any securities mentioned in this article. Find out about Morningstar’s editorial policies.

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About the Author

Karen Andersen, CFA

Strategist
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Karen Andersen, CFA, is a sector director, AM Healthcare, for Morningstar*. In addition to leading the sector team, she covers biopharma firms in the US and Europe, focusing mostly on large-cap firms with foundations in biologic or gene-based medicines.

Before joining Morningstar in 2005, Andersen received a master’s degree in business administration from the Jones Graduate School of Business at Rice University, where she served as senior healthcare analyst for the M.A. Wright Fund and earned the distinction of Jones Scholar. She also holds the Chartered Financial Analyst® designation.

She ranked first in the biotechnology industry, and had the highest score overall, in The Wall Street Journal’s annual “Best on the Street” analysts survey in 2013, the last year the survey was conducted.

Andersen holds a bachelor’s degree in biochemistry from Rice University, where she graduated magna cum laude. She is also a member of Phi Beta Kappa. She has scientific research experience in academia at both Rice University and the University of Queensland in Australia. She also worked in the healthcare industry, both at genetic testing firm Integrated Genetics (now part of LabCorp) and as a research assistant at Lexicon Genetics (now Lexicon Pharmaceuticals).

* Morningstar Research Services LLC (“Morningstar”) is a wholly owned subsidiary of Morningstar, Inc

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