A Look at Biogen’s (BIIB) Valuation Following FDA Feedback on Spinraza High-Dose Application

If you follow Biogen (BIIB), you know that FDA news never goes unnoticed, and the latest twist is no exception. The agency just issued a complete response letter for Biogen’s application to expand the Spinraza label to a higher dose for spinal muscular atrophy, asking for updates to technical sections but raising no flags about the clinical data. For investors, this is not a yes or a no; it is more of a “not yet,” setting up a scenario where Biogen has to move quickly if it does not want to fall further behind in a market filled with alternative treatments.

This regulatory challenge comes in the wake of a year where Biogen’s share price has slid nearly 29% overall, while returns over the past quarter showed some rebound with a 9% gain. The backdrop has also included regulatory wins such as the approval of LEQEMBI for Alzheimer’s in Australia, new products for post-partum depression in Europe, and a series of partnership and pipeline updates. Still, the narrative for 2025 remains mixed, with momentum starting to rebuild but significant uncertainty about long-term earnings strength.

With the stock still trading at a sizable discount to many valuation estimates after this year’s decline, the question is whether investors are being offered a bargain, or if the current price simply reflects the risks of future growth being less certain than before?

Most Popular Narrative: 19.2% Undervalued

The prevailing narrative sees Biogen as significantly undervalued, with its fair value estimated well above the current share price. Despite regulatory and commercial headwinds, the consensus points to a company poised for long-term growth driven by new therapies and expanding international opportunities.

Demand for Biogen's Alzheimer's therapy LEQEMBI is poised for structural long-term growth, supported by a rapidly aging global population and accelerating rates of mild cognitive impairment diagnoses facilitated by breakthroughs in blood-based biomarkers and expanding diagnostic infrastructure. These factors position Biogen to capture a larger patient pool and drive sustained revenue expansion.

Could Biogen become a biotech juggernaut again? The narrative hinges on bold financial assumptions and future profits that rely on pivotal launches and margin expansion. Want to know which metrics shape this fair value? The story behind these forecasts may surprise you; fans and skeptics alike will want to dig deeper before drawing a conclusion.

Result: Fair Value of $170.03 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, persistent competition in international MS markets and unexpected setbacks for new therapies could easily challenge these bullish assumptions and dampen future growth expectations.

Find out about the key risks to this Biogen narrative.

Another View: Discounted Cash Flow Perspective

Taking a step back from analyst price targets, our DCF model offers a different lens. This method suggests Biogen could be worth far more than where it trades now, reinforcing the undervalued argument. However, can a model built on future cash flows really capture all the risks and uncertainties facing the company?

Look into how the SWS DCF model arrives at its fair value.

Simply Wall St performs a discounted cash flow (DCF) on every stock in the world every day (check out Biogen for example). We show the entire calculation in full. You can track the result in your watchlist or portfolio and be alerted when this changes, or use our stock screener to discover undervalued stocks based on their cash flows. If you save a screener we even alert you when new companies match - so you never miss a potential opportunity.

Build Your Own Biogen Narrative

If you see the outlook differently or want to verify these figures yourself, you can craft your own perspective in just a few minutes using Do it your way.

A great starting point for your Biogen research is our analysis highlighting 3 key rewards and 1 important warning sign that could impact your investment decision.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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