Biogen cut at Jefferies as '2025 has a tough setup'

Investing.com -- Jefferies downgraded Biogen (NASDAQ:BIIB ) from a Buy to Hold on monday, citing a challenging outlook for 2025. 

The firm slashed its price target for the stock to $180 from $250 due to concerns over modest sales growth, a lackluster pipeline, and critical revenue declines looming by 2030.

Analysts highlighted that Biogen’s Alzheimer's drug, Leqembi, faces slower-than-expected growth, with Jefferies lowering its 2025 sales estimates to $466 million, below the consensus of $494 million. 

“We move to HOLD as 2025 has a tough setup: modest Leqembi (we're below consensus) and Skyclarys US (mostly penetrated), and real need for more pipeline and serious BD to get investors re-engaged,” said Jefferies.

By 2030, the investment bank projects Leqembi sales at $1.6 billion, significantly under consensus expectations of $4 billion. 

The report stated, “Investors haven’t bought into Leqembi, and we doubt 2025 convinces Street as we remain below.”

Another pressing issue is said to be Biogen's dependence on royalties from Ocrevus, which currently contributes approximately $1.4 billion annually to its operating income. 

Jefferies warned that this royalty could see a 50% reduction by 2030 due to biosimilar competition, posing a 20-30% hit to Biogen’s earnings power. “This is why they need more pipeline and business development soon to offset $1.5 billion of 2030 loss of Ocrevus,” analysts explained.

Pipeline concerns also weigh on Biogen’s prospects, according to Jefferies. The company has faced multiple pipeline failures in 2024, and key late-stage programs like felzartamab and dapi are not expected to produce results until 2027 or later, leaving little near-term growth potential.

Jefferies suggested Biogen may seek acquisitions in specialty areas like Prader-Willi syndrome or other orphan indications. However, analysts concluded, “2025 has a tough setup,” making immediate recovery unlikely.

 

Source: Investing.com