Ahead of the Bell: Analyst lowers Biogen rating

Biogen Idec Inc.'s new multiple sclerosis treatment Tecfidera could face challenges in Europe from generic drugs that pressure its pricing and market share, according to a Citi analyst who lowered his rating on the stock.

Analyst Dr. Yaron Werber said in a research note that he still likes the drug, but he doesn't think the European Medicines Agency will provide regulatory data protection. That would prevent other companies from referencing its data when they submit their generic drug applications.

Tecfidera is a pill taken once per day, and analysts expect it to become a leading treatment for multiple sclerosis. The U.S. Food and Drug Administration approved it in late March. Werber said the drug's U.S. launch should turn out better than expected, and Tecfidera may tally $422 million in sales this year.

"We are big fans of the drug in the U.S.," Werber wrote in a note released Tuesday after markets closed.

But the analyst also said that the stock has had a nice run so far this year — shares were up more than 50 percent as of Tuesday — and its high price-to-earnings multiple reflects an investor expectation for upside, not a negative surprise. He lowered his rating on the shares to "Neutral" from "Buy."

"We will look for a better entry point to get more constructive on the stock again once the risks facing Tecfidera in Europe become clearer or after the stock corrects," the analyst wrote.

Werber had raised his rating on Biogen shares to "Buy" from "Neutral" in February.

Biogen shares fell $2.79 to $220.24 Wednesday morning before markets opened.