Biogen needs ‘this’ to unlock a 60% upside in its stock

Biogen Inc (NASDAQ: BIIB) stock could shoot up 60% if the biotech company reports positive results for its investigational Alzheimer’s drug Lecanemab in fall of 2022, says Mohit Bansal.

Bansal’s bull case for the Biogen stock

The Wells Fargo analyst upgraded BIIB on Monday to “overweight” and said the recent pullback makes the stock even more attractive. Defending his call on CNBC’s “The Exchange”, he said:

Risk/reward related to Lecanemab Phase III trial is too compelling. If the trial fails, the stock could be down only 7-15% as a lot of the negative news is already in the stock. However, if it does work, the stock could jump to $360. It’s too good to ignore.

Biogen is set to report its quarterly results on May 3^rd. The stock trades at a PE multiple of 20.53 at present.

Could Lecanemab get a nod from the CMS?

Earlier this year, the CMS refused to cover for Aduhelm; Biogen’s FDA approved Alzheimer’s drug. Still Bansal is convinced such will not be the case with Lecanemab. He added:

When CMS released those guidelines, it left the room open for drugs that are successful in Phase III trial. If a drug comes out with a successful Phase III trial, the CMS won’t stop the payment given the unmet need.

Bansal dubs Biogen the top pick for investors interested in playing the Alzheimer’s space. His view is in contrast with the famed investor Jim Cramer, who recommends Eli Lilly instead.