Biogen: An Undervalued Opportunity In An Overpriced Market

Summary

• Biogen has an impressive portfolio of assets that it is continuing to work towards developing. The most exciting of these is Aducanumab.
• Even if Aducanumab isn't approved, the company has an incredibly exciting asset portfolio. That will continue to support strong earnings.
• Going forward, the company will continue generating strong earnings. These strong earnings will continue to generate strong shareholder returns.
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Biogen (NASDAQ: NASDAQ:BIIB) saw its share price increase by double digits this past week with the following press release:

FDA Accepts Biogen's Aducanumab Biologics License Application For Alzheimer's Disease With Priority Review

The application, under priority revenue, is expected to have a response 7 months from the press release, with a March 7, 2021 action date. The drug, passing through several Phase 3 trails, will be the first approved therapy for Alzheimer's that doesn't simply treat the symptoms. It's potential in this regard is enormous.

As we'll see throughout this article, Biogen's impressive asset portfolio, even if Aducanumab isn't accepted, combined with Aducanumab's potential makes the company an incredible investment opportunity.

Aducanumab - The Science and FDA Approval

Aducanumab is a drug that has been in development for nearly a decade at this point. Biogen has had a volatile history, with early-March initial Phase 3 data causing it to cancel development, while later continued data encouraged the company to resubmit it to the FDA. Both actions caused massive volatility in the company's share price.

The main value in the drug is based on Biogen's Phase 3 trials, which, based on press releases, is here:

Aducanumab is a human monoclonal antibody that selectively binds to amyloid β fibrils and soluble oligomers. In an early phase multiple ascending dose trial, cohorts comprising 165 patients with prodromal or mild Alzheimer's disease received monthly intravenous doses of 1 mg/kg, 3 mg/kg, 6 mg/kg, or 10 mg/kg, and showed substantial reduction of amyloid plaques in a dose-dependent and time-dependent manner, such that after 12 months nearly half the patients who received the 10 mg/kg dose no longer had positive amyloid PET scans. This finding was robust and unquestionable; plaques were markedly decreased in all cortical brain regions examined. However, clinical effects, assessed using four clinical scales after 6 and 12 months of treatment, were far less

Analyst’s Disclosure:I am/we are long BIIB. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.