(Bloomberg) -- Biogen Inc. shares are edging higher before the bell following a 26% gain on Tuesday on a surprise revival of hopes for a thought to be cast off Alzheimer’s medicine. Among a sea of skeptics, Guggenheim and SVB Leerink have been converted to bulls.
The experimental drug known as aducanumab “has the potential to completely change the profile of the company,” Guggenheim analyst Yatin Suneja wrote in a note upgrading the stock to buy from neutral. The stock could return to trading in the $360 range ahead of a decision from the Food and Drug Administration, he said raising his 12-month price target to $365. That’s about $140 above where shares were trading before Tuesday’s announcement.
Aducanumab could reach more than $10 billion in annual sales, according to Guggenheim. Biogen shares rose 2% to $287.65 in pre-market trading. Tuesday’s surge, which added $10.8 billion to its valuation, was the biggest one-day gain in 20 years.
SVB Leerink also turned bullish, with analyst Geoffrey Porges raised his rating to outperform from market perform. “Even with relatively conservative assumptions, and a 50% probability of approval, our fair estimate for the stock easily reaches $350,” Porges wrote as he lifted his price target from $256.
Still, Suneja acknowledges the drug’s clinical will remain “debatable and likely to be the key focus for investors.” With 22 of the 33 analysts tracked by Bloomberg keeping their neutral ratings on the stock -- even as many raised their price targets -- Suneja’s call is in the minority.
One doubter, Raymond James analyst Steven Seedhouse who rates the stock market perform, told his clients he was assigning a “0% probability” and called the regulatory filing a “hail Mary.” In addition to today’s upgrades, six other analysts rate Biogen with the equivalent of a buy and three rate it a sell.
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