Should Biogen sell its hemophilia biz? Yes, says Leerink analyst

Biogen

As rumors abound that Biogen is looking to get rid of its $800 million hemophilia assets, some analysts are saying hey, you might as well--and you could see $6 billion for your troubles.

Leerink analyst Geoffrey Porges said in a note to clients that the reports of a sale--which originated from sources "familiar with the matter" talking to Reuters over the weekend--would be the best thing for the company.

While Leerink values the hemophilia business at $5.9 billion through the early 2030s patent life of its two newly marketed drugs Alprolix and Eloctate, Biogen "would divest itself of a therapeutic area that makes limited sense as the company focuses its portfolio and interests on treatments for neurological disorders," according to Porges.

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The drugs--launched in 2014 and set to make around $800 million this year--have been developed with Swedish Orphan Biovitrum AB (SOBI). Bearing in mind all the cross-dealing between the two companies, Leerink predicts that shedding the unit could yield $6 billion plus, given the lifetime potential of the drugs. That would give Biogen some deep pockets for future research deals.

Who might buy? Well, Leerink says you can cut a lot of companies out as they already have programs in the space, so Bayer and Shire can be discounted--although Porges said that Novo Nordisk and Pfizer "may be interested from this group."

Other companies that may consider such an investment could include quasi-specialty drug companies with longstanding interests in branded injectable specialty medicines--this list could include German Merck and AbbVie, as well as Amgen.

Leerink believes that ultimately, Biogen should focus on what it knows best, which is its multiple sclerosis portfolio (which makes up around 80% of its revenue) and the "considerable potential" of its pipeline of treatments for neurological diseases, including Alzheimer's, Parkinson's and amyotrophic lateral sclerosis in the longer term.

Keeping its blood disorder drugs would also open it up to risk of new gene therapies that are currently in the works--something it has only half-heartedly attempted to keep up with. Porges adds that "for Biogen, these products are in an area they don't internally know and understand well, and they are increasingly likely to be isolated assets facing competitors with broad portfolios in bleeding disorders.

"Moreover, despite the company's best intentions, investors have almost exclusively focused their attention on the performance and outlook for the company's core MS franchise, and the potential for its late stage Alzheimer's disease program," Porges noted.

And Biogen's CEO George Scangos has said that the hemophilia investment was already made when he assumed his position in 2010; he has acknowledged that it had not much to do strategically with the rest of the company's portfolio.

Biogen could also do with a nice buffer given that it has had to cut hundreds of its staff in the past year while also cutting a number of research programs. This has come after weaker-than-expected sales for its key MS pill Tecfidera and challenges to the drug's IP. A nice chunk of $6 billion change would do rather nicely for the problems it's currently facing.

- see Leerink's note

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