Street View: Biogen's $5.6 billion Apellis bet a strategic fit

Biogen BIIB.O agreed to buy Apellis Pharmaceuticals APLS.O for about $5.6 billion, adding a promising kidney disease drug to broaden its rare-disease portfolio amid efforts to diversify beyond its slowing multiple sclerosis franchise.

At least two analysts raised PT on Biogen

PRESSING NEED

Needham ("hold") says the acquisition has strong strategic value for Biogen's key late-stage kidney drug felzartamab, though the deal economics longer-term may be uncertain

Citi ("Neutral," PT: $215) says there was an "increasingly pressing need" for business development deals before its late-stage pipeline of drugs mature

Brokerage says the pressure on Biogen shares after the deal was due to "the lack of an inflection point investors had hoped for"

Oppenheimer ("Outperform," PT: $275) says decision to acquire APLS is consistent with BIIB's previously articulated business development strategy

Brokerage says the addition of APLS's approved drug Empaveli provides "an established nephrology infrastructure to build the foundation for a potential future launch of felzartamab"

J.P.Morgan ("Neutral") says the deal was a "logical one for BIIB as it provides near-term growth to the portfolio (mid to high teens through 2028) and strengthens the company's rare kidney presence longer-term"