Alzheimer’s Treatments And Gene Therapies Will Expand Care Access

Key Takeaways

• Expanding focus on neurodegenerative diseases, new treatment options, and personalized therapies positions Biogen for sustained revenue growth and improved profitability.
  
• Diversification into rare diseases and advanced biologics, supported by ongoing pipeline development, reduces risk and enhances quality and stability of future earnings.
  
• Mounting drug pricing pressure, competitive threats, R&D and integration risks may limit Biogen’s revenue growth and compress margins across key therapeutic areas.

Catalysts

Biogen Inc. discovers, develops, manufactures, and delivers therapies for treating neurological and neurodegenerative diseases in the United States, Europe, Germany, Asia, and internationally.

• Biogen’s rapidly expanding presence in Alzheimer’s and other neurodegenerative diseases is unlocking a significant new long-term growth driver, fueled by both the aging global population and physicians’ increasing ability to diagnose and treat more patients earlier, supporting the expectation of a step-change in top-line revenue over the next decade.
  
• Subcutaneous formulations and at-home administration options for LEQEMBI, combined with the coming availability of simple blood-based diagnostics, will dramatically simplify patient access and physician workflow, accelerating adoption rates and extending treatment duration, which has the potential to significantly expand recurring revenues and improve operating margins.
  
• The continued pipeline maturation—evidenced by five Phase III studies initiating this year and multiple late-stage assets in high-value indications such as AMR, IgAN, and rare neurological conditions—provides increasing shots on goal and reduces pipeline risk, pointing to earnings growth as these assets reach commercialization.
  
• Biogen’s strategic investments and partnerships in rare diseases, gene therapy, and antisense oligonucleotides are expected to diversify the portfolio beyond legacy MS, unlock high-margin orphan drug markets, and enhance gross and net margins, supporting more stable and higher-quality earnings in the future.
  
• Advances in personalized medicine and biologics are enabling Biogen to develop first-in-class and highly targeted therapies that command premium pricing and strong reimbursement globally, which will drive both revenue per patient and overall profitability as these markets expand with growing willingness among payors to fund transformative treatments.

Biogen Future Earnings and Revenue Growth

Assumptions

• This narrative explores a more optimistic perspective on Biogen compared to the consensus, based on a Fair Value that aligns with the bullish cohort of analysts.
• The bullish analysts are assuming Biogen's revenue will decrease by 0.4% annually over the next 3 years.
• The bullish analysts assume that profit margins will increase from 15.1% today to 31.9% in 3 years time.
• The bullish analysts expect earnings to reach $3.1 billion (and earnings per share of $21.45) by about May 2028, up from $1.5 billion today. The analysts are largely in agreement about this estimate.
• In order for the above numbers to justify the price target of the more bullish analyst cohort, the company would need to trade at a PE ratio of 15.1x on those 2028 earnings, up from 11.6x today. This future PE is lower than the current PE for the US Biotechs industry at 18.3x.
• Analysts expect the number of shares outstanding to grow by 0.64% per year for the next 3 years.
• To value all of this in today's terms, we will use a discount rate of 6.71%, as per the Simply Wall St company report.

Biogen Future Earnings Per Share Growth

Risks

• Global pricing pressures and increased scrutiny of drug costs, as seen with the Medicare tax impact on SKYCLARYS and the careful budget evaluations by European regulators, could reduce reimbursement rates and limit future revenue growth.
  
• The MS franchise, historically Biogen’s largest revenue driver, is experiencing accelerating revenue declines due to the entry of generics and biosimilars for TYSABRI and TECFIDERA, which has already led to an 11% year-over-year sales drop in the MS segment and is expected to drive a steeper overall company revenue decline in 2025.
  
• Biogen’s heavy investment in late-stage neuroscience and immunology trials creates ongoing R&D cost pressures, and the company has acknowledged its historically high-risk, neuroscience-concentrated pipeline, raising the risk of pipeline setbacks or failed studies that could compress net margins if milestone drugs do not deliver.
  
• Intense competition in neurology and rare diseases, such as from Lilly’s donanemab for Alzheimer’s, and upcoming biosimilars, risks eroding market share and pricing power, potentially limiting both revenue gains from new products and the net earnings expected from launches like LEQEMBI and ZURZUVAE.
  
• Biogen’s strategy of growth through acquisitions and external collaborations, including the recent deals for Zorevunersen and with Stoke Therapeutics, carries integration and execution risks; failure to realize anticipated synergies could increase operating costs and reduce future earnings.

Valuation

• The assumed bullish price target for Biogen is $257.67, which represents two standard deviations above the consensus price target of $173.52. This valuation is based on what can be assumed as the expectations of Biogen's future earnings growth, profit margins and other risk factors from analysts on the bullish end of the spectrum.
  
• However, there is a degree of disagreement amongst analysts, with the most bullish reporting a price target of $260.0, and the most bearish reporting a price target of just $115.0.
  
• In order for you to agree with the bullish analysts, you'd need to believe that by 2028, revenues will be $9.7 billion, earnings will come to $3.1 billion, and it would be trading on a PE ratio of 15.1x, assuming you use a discount rate of 6.7%.
  
• Given the current share price of $116.82, the bullish analyst price target of $257.67 is 54.7% higher.
  
• 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.