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Biogen's Samsung Bioepis Stake Sale a Positive, Analysts Say

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By Sam Boughedda — Biogen Inc (NASDAQ:BIIB) shares rose 0.2% on Friday, a day after the biotech said it would sell a stake in its Bioepis joint venture.

The company said Thursday night it was selling the stake to Samsung Biologics for up to $2.3 billion.

Biogen has a 49.9% share in the joint venture. It initially invested in a 15% stake in Samsung Bioepis when it was established in 2012, with the company having the right to purchase up to 49.9%, which it exercised in June 2018.

Biogen is currently facing uncertainties surrounding its Alzheimer's drug Aduhelm. Analysts at Needham and JPMorgan view the sale of its Bioepis stake favorably.

Needham analyst, Ami Fadia, told investors in a note they "believe the sale will give management the capital to pursue strategic alternatives including business development while divesting its stake in a business where it did not have any long term prospects for a reasonable return.

"With uncertainty around Aduhelm, the company is under pressure to explore alternatives growth opportunities, and we see this as a positive step in that direction."

Fadia reiterated a buy rating on Biogen and a $292 price target.

In addition to Needham, JPMorgan's Cory Kasimov said in a client note that the deal bolsters Biogen's balance sheet and provides added flexibility. However, the analyst warned that the bigger focus is still on the Alzheimer's outlook, with the "obvious challenges" facing Aduhelm.

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