Biogen Gets Analyst Upgrade and Announces Layoffs

Shares of biotech company Biogen were moving higher on Thursday after the company received an upgrade from an analyst.

RBC Capital Markets analyst Brian Abrahams upgraded Biogen stock on hopes for its Alzheimer’s drugs.

Abrahams sees an $8 billion peak opportunity if the CMS decision comes out in Aduhelm’s favor and if Biogen succeeds with lecanemab. Both drugs target beta amyloid, an abnormal protein that builds up in the brains of Alzheimer’s patients.

“Our recent doctor survey work suggests that despite all the negative publicity, Alzheimer’s physicians would have sufficient appetite to prescribe beta-amyloid antibodies to support multibillion-dollar sales,” the analyst said in a report to clients.

It was hours later Biogen started laying off employees as part of what it calls a cost-savings initiative. The company announced its plan to save $500 million in December.
There was no say on whether the layoffs are connected to a slow launch for its approved Alzheimer’s drug, Aduhelm.

An official with Biogen reportedly told Endpoints News that two-thirds of the Alzheimer’s sales team and all of the Alzheimer’s field leaders had been laid off.

“In support of these measures, some of our colleagues in the U.S. were recently informed that their roles are being eliminated,” Biogen said in a statement. “These changes will help the company remain flexible so additional investments can be made in our pipeline and other strategic initiatives.”

The company is looking ahead to a Centers for Medicare and Medicaid Services (CMS) decision around the controversial Alzheimer’s drug, Aduhelm. CMS will reimburse the costs of Aduhelm for patients enrolled in clinical studies.

The Food and Drug Administration approved Aduhelm for patients with mild cognitive impairment due to Alzheimer’s disease.

“At current levels less than 210, shares appear to be baking in less and less for Alzheimer’s which should also limit downside risk on additional near-term developments and improve the overall setup,” said Abrahams.

Disclaimer: We have no position in any of the companies mentioned and have not been compensated for this article.