RBC's Michael Yee Still Sees Value in Biogen's Long-Term Pipeline

Biogen Inc (NASDAQ: BIIB) shares are being killed today after the company reported earnings that missed expectations and lowered guidance. Shares are trading down by more than 18 percent on Friday to below $315 at last.

Michael Yee at RBC Capital Markets said that the stock may "take a bit of time to settle before long-term investors step in," but that "longer-term investors will find value in the pipeline." Further, Yee said that he cannot "rule out the ability to do deals, buy back stock, and other capital deployment or business deployments."

"Ultimately, long-term investors get the same huge pipeline including Phase III Alzheimer's now and Phase II LINGO still on the come in H1:16 and the stock is more than $100 cheaper than it was earlier in the year," Yee added.

Related Link: Biogen Posts Higher Q2 Earnings, But Sales Miss Views

Forecast

Just between those two opportunities, Yee forecasted that there could be $5 to $20 billion in pipeline in the next few years. The Alzheimer's drug alone could "double the company's revenue and earnings" in Yee's view.

Yee also said that there is a potential that Biogen had a "kitchen sink" quarter and that, combined with the fact that management's guidance is typically conservative, means that it "could leave some room for upside" moves.

Given Friday's steep decline, Biogen is now lower by more than 7.5 percent on the year and down 6.7 percent over the past 52 weeks. The 52-week high, hit in April is more than 52 percent above current price.

Biogen was last seen trading at $311.43.

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