Regulatory Approvals And Pipeline Progress Will Redefine Neurodegeneration Care

Key Takeaways

• Regulatory approvals and upcoming diagnostics are set to accelerate Leqembi adoption, expanding access and recurring royalty revenues from an underserved and growing patient base.
  
• Diversified pipeline and technology partnerships position BioArctic for long-term growth beyond current products, adding high-margin revenue streams and multi-indication opportunities.
  
• Heavy dependence on Leqembi and a challenging neurodegeneration pipeline expose BioArctic to financial, regulatory, and competitive risks that could constrain future growth and profitability.

Catalysts

Develops biological drugs for patients with central nervous system disorders in Sweden.

• Recent regulatory approvals for Leqembi in major global markets (U.S., Japan, China, Europe) and ongoing price/reimbursement negotiations set up substantial near-term growth in recurring royalty revenues as patient access expands-especially as the aging global population increases the Alzheimer's patient pool, likely driving significant top-line revenue increases over the next several years.
  
• The anticipated FDA approval and broader rollout of blood-based biomarker diagnostics for Alzheimer's will simplify and accelerate diagnosis in primary care, lowering barriers to patient identification and treatment initiation with Leqembi. This is expected to materially accelerate market penetration and drive higher revenue growth from a currently underserved patient base.
  
• Significant lifecycle management initiatives for Leqembi-such as IV maintenance dosing and subcutaneous autoinjector formulations-are poised to improve patient/physician convenience, facilitate home administration, and reduce healthcare system costs. This should further boost adoption rates, extend duration of use, and expand total addressable market, supporting long-term recurring revenue growth and potentially improved margins.
  
• The BrainTransporter technology platform is validated through a major licensing deal with Bristol Myers Squibb (including a $100M upfront, $1.25B in milestones, and future royalties) and is drawing continued external partnership interest. Future platform out-licensing could add incremental, less-risky high-margin revenue streams, diversifying income beyond milestone payments and Leqembi royalties.
  
• Advancing a robust, differentiated pipeline for CNS diseases-especially with exidavnemab in Parkinson's, MSA, and dementia indications-positions BioArctic to capture growing healthcare investment and demand for disease-modifying neurology solutions driven by global demographic trends, providing an avenue for multi-year, multi-indication revenue growth beyond the current product cycle.

BioArctic Future Earnings and Revenue Growth

Assumptions

• Analysts are assuming BioArctic's revenue will grow by 12.8% annually over the next 3 years.
• Analysts assume that profit margins will shrink from 59.4% today to 20.4% in 3 years time.
• Analysts expect earnings to reach SEK 444.0 million (and earnings per share of SEK 9.2) by about August 2028, down from SEK 902.0 million today.
• In order for the above numbers to justify the analysts price target, the company would need to trade at a PE ratio of 66.8x on those 2028 earnings, up from 23.4x today. This future PE is greater than the current PE for the SE Biotechs industry at 28.1x.
• Analysts expect the number of shares outstanding to grow by 0.22% per year for the next 3 years.
• To value all of this in today's terms, we will use a discount rate of 4.92%, as per the Simply Wall St company report.

BioArctic Future Earnings Per Share Growth

Risks

• Over-reliance on Leqembi royalties and milestones for sustained profitability exposes BioArctic to significant concentration risk; any setbacks in Leqembi's commercial uptake, regulatory delays, competition, or safety concerns could materially impact future revenues and net earnings.
  
• BioArctic's pipeline is heavily focused on neurodegenerative diseases, which historically have high clinical failure rates; costly late-stage trial failures for exidavnemab or BrainTransporter assets could erode long-term revenue growth and threaten profitability.
  
• Increasing R&D and operational costs (projected to rise 60–80% in 2025) alongside a relatively modest internal commercialization infrastructure may pressure net margins and create financial volatility, especially if milestone inflows or new partnerships do not materialize as expected.
  
• Greater scrutiny on healthcare spending and drug pricing in key markets (notably Europe and the U.S.), along with complex and protracted local price and reimbursement negotiations, could limit approved pricing for Leqembi and other future products, thus constraining long-term revenue potential.
  
• The neurodegeneration field is becoming increasingly competitive, with large pharmaceutical firms and alternative modalities (such as gene therapies and digital therapeutics) threatening market share and reducing the likelihood of large, lucrative partnerships or royalty streams, dampening future revenue and valuation growth.

Valuation

• The analysts have a consensus price target of SEK288.4 for BioArctic based on their expectations of its future earnings growth, profit margins and other risk factors. However, there is a degree of disagreement amongst analysts, with the most bullish reporting a price target of SEK350.0, and the most bearish reporting a price target of just SEK232.0.
• In order for you to agree with the analyst's consensus, you'd need to believe that by 2028, revenues will be SEK2.2 billion, earnings will come to SEK444.0 million, and it would be trading on a PE ratio of 66.8x, assuming you use a discount rate of 4.9%.
• Given the current share price of SEK238.0, the analyst price target of SEK288.4 is 17.5% higher. Despite analysts expecting the underlying buisness to decline, they seem to believe it's more valuable than what the market thinks.
• We always encourage you to reach your own conclusions though. So sense check these analyst numbers against your own assumptions and expectations based on your understanding of the business and what you believe is probable.