Biogen Is More Likely to Be a Buyer Than Seller

As the prospects for its once-promising Alzheimer’s drug continue to dim, Biogen Inc. (

BIIB, Financial) is reportedly exploring strategic options, including selling itself or acquiring a smaller bioscience company. The Boston-area biotech has gone so far as to hire Goldman Sachs Group Inc. (GS, Financial) to put together a roster of potential acquisition targets, Stat reports, citing a person familiar with the companies’ relationships.

Investors are hungry for any move that will shore up the company’s shares, which are trading at a two-year low of $236 after the U.S. Centers for Medicare and Medicaid Services said this week it will only cover treatment with Aduhelm, Biogen’s Alzheimer’s treatment, if patients are enrolled in a clinical trial, thus greatly diminishing the potential use of the medication. This comes after Biogen late last month cut the price of Aduhelm by around half, to $28,200 per year, to make it available to more patients.

Reuters reported the company’s CEO, Michel Vounatsos, said he wants to meet with the CMS before a final decision is rendered. “We want to be constructive with CMS. We want just to have a dialogue,” Vounatsos said. If the company can’t get the agency to budge from its position, Biogen plans to consider other avenues to accelerate the take-up of the treatment, including cutting its costs and other strategic options.

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If the restrictive CMS policy is finalized, “additional waves” of reshuffling will come to protect the company’s bottom line, Vounatsos told investors during a conference call on Thursday.

Goldman’s list of smaller neuroscience companies that would make solid additions to Biogen includes Biohaven Pharmaceutical Holding Company Ltd. (

BHVN, Financial), maker of the rapidly growing migraine drug Nurtec ODT; autoimmune disease specialist Aurinia Pharmaceuticals Inc. (AUPH, Financial); and Amylyx Pharmaceuticals, which is likely to go public after filing a New Drug Application for its drug to treat amyotrophic lateral sclerosis.

Of the two listed companies, New Haven, Connecticut-based Biohaven would be the most expensive given its market cap of $8 billion and the more than 40% gain in its shares over the past year. During the same period, Canadian company Aurinia has seen its stock climb about 27%, giving it a valuation of about $2.5 billion.

Mizuho analyst Salim Syed said in an interview with Fierce Pharma in December that it’s unlikely Biogen will make an acquisition because it’s not in its DNA to go out and buy anything late stage. Of course, that prediction was before the CMS announcement.

Syed’s opinion was seconded by Cantor Fitzgerald analyst Alethia Young, who wrote in a Friday note that she remains “skeptical about the possibility” of a merger and acquisiton deal at Biogen—even though it may help the company’s pipeline.

What about the possibility of Biogen selling itself? Not likely, according to Syed, noting that any acquirer would be saddled with the Aduhelm public relations disaster. And besides that, Biogen’s other businesses are being pressured.

A potential takeout of Biogen remains “difficult to envision given the pipeline risk and challenges to base business,” RBC Capital Markets analyst Brian Abrahams wrote in a Thursday note. As Syed put it, “Nobody wants a decliner.”

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