This biotech firm has room to run, even as its drug royalties are set to shrink
Biogen could continue to notch growth, even as the biotechnology firm prepares to see lower royalties tied to one of its popular drugs, according to Piper Sandler. The investment firm upgraded Biogen to overweight from neutral. It also raised its price target to $214 from $177, implying 21% upside from Monday’s close. “It is clear to us that the addition of Syfovre and Empaveli at a minimum fills a gap in the top-line created by loss of exclusivity (LOE) exposure for legacy multiple sclerosis (MS) assets (particularly Ocrevus and associated royalties),” Piper Sandler analyst David Amsellem said Monday in a note to clients. Ocrevus, a multiple sclerosis drug co-developed by Biogen, is a significant source of royalty-based income for the biotech company. Its patent exclusivity is due to expire between 2028 and 2029, which will enable other companies to create and sell their own versions of the drug. But while that could eat into Ocrevus’ sales, investors in Biogen shouldn’t fret, according to Piper Sandler. “The combination of the ramp of Empaveli with an advancing immunology pipeline (particularly CD38-directed therapy felzartamab) can readily return BIIB to meaningful top-line growth following the potential step-down in Ocrevus royalties,” Amsellem wrote. BIIB YTD mountain Biogen shares are flat in 2026. The analyst added that the erosion of Ocrevus sales — and Biogen’s royalties — are likely to be “less bad owing to execution on life cycle management.” Those factors should contribute to multiple expansion from the company’s current enterprise value to current year EBITDA estimate ratio of roughly 11x, according to Piper Sandler. Piper Sandler’s call goes against consensus on Wall Street. Of the 37 analysts covering Biogen, 15 have a buy or strong buy on the stock, according to LSEG data. The majority of analysts are at a hold rating. Shares are flat since the beginning of the year, putting the stock’s performance in line with the overall market.