Health and Healthcare

5 Biotechs With the Most Upside This Earnings Cycle


With earnings just around the corner, one key analyst is taking the opportunity to share its thoughts on select mid-cap and large-cap biotech companies. Despite a modest erosion to fundamentals and sector headwinds, Jefferies does not anticipate any dramatic earnings misses, which could help sentiment continue to turn around. Although this sentiment may be positive going into earnings, price targets were still cut for some companies.

Jefferies gave its take on the first quarter as follows:

Fundamentals have eroded modestly for the mid/large cap names over the past few months, ranging from increasing IP conflicts (Tecfidera, Harvoni/Sovaldi, Abraxane, Praluent), pricing scrutiny (Orkambi, Harvoni/Sovaldi, Medicare Part B), and slowing launches (Otezla), leading us to lower our price targets for several companies. Nonetheless, despite this, and typical 1Q seasonal softness across therapeutics we expect to recur in the first quarter, with a low likelihood for any unexpected dramatic misses based on our analyses, and increased recognition that the group has been oversold, sentiment could continue its turnaround – boosted if M&A chatter continues.


After a strong fourth quarter, Jefferies expects a more inline first quarter for Biogen Inc. (NASDAQ: BIIB), with multiple sclerosis franchise sales slightly mixed and hemophilia slightly above consensus. With limited evidence of Tecfidera Rx growth from the DTC yet, increasing IP risk, and no news yet on the key BAN2401 trial interim, the high-risk but high-reward LINGO data catalyst could increase in prominence. Jefferies still believes Biogen’s valuation already bakes in known long-term challenges to the existing portfolio and does not fully reflect the probability-weighted upside potential from their pipeline.

Shares of Biogen were trading at $268.74 on Wednesday morning, with a consensus analyst price target of $349.89 and a 52-week trading range of $242.07 to $432.88. Jefferies has a Buy rating but lowered its price target to $325.

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