Morgan Stanley Upgrades Biogen Stock (BIIB)

By Noah Long ● July 28, 2020
  • Recently, Biogen Inc (NASDAQ: BIIB) was upgraded by Morgan Stanley from underweight to overweight. These are the details.

Recently, Biogen Inc (NASDAQ: BIIB) was upgraded by Morgan Stanley from underweight to overweight, according to Business Insider. This is a rare case of a double upgrade. Morgan Stanley cited a compelling risk versus reward for the long-term of the company.

The price target was increased on Biogen to $357 from $263. This is about a 35.7% upgrade

“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,” wrote Morgan Stanley analysts in a report led by Matthew Harrison. “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.”

Morgan Stanley noted that investors are currently pricing in under 25% probability of success, but this will increase to more than 50% as aducanumab moves closer to the potential FDA approval date, which is expected in March 2021.

And investors who are taking a “wait-and-see approach” could potentially miss a potential up to 20% move in the near term for Biogen, says the note.

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

The Biogen stock year-to-date is down about 3.6%, but it is up 20.1% over the last year.