Biogen (BIIB.US): Upgrading to OW Ahead of 2027 Catalysts

We are upgrading BIIB to OW from N ahead of an increasingly compelling catalyst path and an improved long-term growth outlook. We are approaching several meaningful clinical readouts/competitor readthroughs in 2027 including: 1) felzartamab in AMR, representing a >$2bn opportunity, 2) readthroughs from LLY's TRAILBLAZER-ALZ-3 to Leqembi, and 3) litifilimab in CLE, where there are currently no approved therapies. The increased visibility into the late-stage pipeline supports an improved longer-term growth outlook, with the continued ramps of growth products (Leqembi, Skyclarys) together with potential new product launches (litifilimab, felzartamab) more than offsetting anticipated declines across the MS business as well as CD20 royalties over time. We establish a Dec-2027 price target of $300 (prior Dec-26 $210), based on a DCF valuation that assumes an 8.5% discount rate and a 0% terminal growth rate. Downside risks include lack of CMS reimbursement for Leqembi, pipeline setbacks for k