Before the Move: Watch Biogen ahead of Alzheimer's drug draft coverage decision

Morgan Stanley sees Biogen stock trading up 10%-15% on a positive outcome
Morgan Stanley analyst Matthew Harrison named Biogen (BIIB) a catalyst driven idea, while keeping an Overweight rating and a price target of $363 on the shares, with CMS set to release its draft coverage decision on monoclonal antibodies targeting amyloid for the treatment of Alzheimer's disease by January 12. In a note to investors issued last night, the analyst stated that his base case scenario is coverage with evidence development given the unmet need and historical precedents.

CATALYST DRIVEN IDEA: In a research note to investors, Morgan Stanley analyst Matthew Harrison named Biogen a catalyst driven idea, while keeping an Overweight rating and a price target of $363 on the shares. With the Centers for Medicare & Medicaid Services scheduled to release its draft coverage decision on monoclonal antibodies targeting amyloid for the treatment of Alzheimer's disease by January 12, the analyst stated that his base case scenario is coverage with evidence development given the unmet need and historical precedents. Harrison added that his scenarios suggest a positive outcome could occur in about 90% of the outcomes, anticipating the stock to trade 10%-15% higher.

The analyst also noted that following a proposed decision memo, there will be a second 30-day public comment period. A final decision is expected by April 12. While the proposed decision is subject to modification, the initial read of the draft memo will set the tone of the likely coverage decision and is a key focus among investors, he added. The NCD, or National Coverage Determination, decision applies to manufacturers' antibodies targeting amyloid and is not specific to Biogen's Aduhelm. A favorable coverage decision is needed to inflect Aduhelm U.S. sales in the second half of 2022, Harrison argued, with sales of the drug being limited since launch given the controversy around approval and a lack of clear reimbursement coverage.
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