Can Biogen's New Drugs Revive Growth Amid Legacy Sales Slump?

Biogen faces continued erosion in its legacy MS and SMA franchises, with 2026 MS revenues excluding Vumerity expected to decline by a mid-teen percentage versus 2025 due to generic and biosimilar competition. Newer growth drivers like Leqembi, Skyclarys and Zurzuvae are expanding, but management says they are still not large enough to fully offset near-term declines from Tecfidera, Tysabri and Spinraza. The article also notes lowered earnings estimates for 2026 and 2027, despite a reasonably attractive valuation.

Analysis

BIIB is in a classic portfolio-transition air pocket: the market is likely to keep paying for the optionality in the newer assets while discounting the inevitability of erosion in the legacy base. The key second-order issue is not whether the new brands grow, but whether their growth is steep enough to offset the MS franchise before the earnings comp base resets lower again in 2026-2027. That means estimate revisions may remain a more important stock driver than absolute revenue growth for the next 2-4 quarters.

Leqembi is the main swing factor, but the market may be underestimating adoption friction from infrastructure, not science. Blood-based diagnostics and subcutaneous maintenance can expand the addressable pool, but initiation remains bottlenecked by physician capacity, imaging, and reimbursement workflows; those are rollout constraints that usually take 2-3 budget cycles to normalize. If initiation approval is delayed or launches underwhelm, the market will likely refocus on the declining operating leverage in the base business.

The cleaner read-through is that BIIB is still a cash-flow story with a pipeline overlay, not a re-rating story yet. The Apellis assets add diversification, but they also introduce integration and execution risk at exactly the moment when core earnings visibility is weakening. For competitors, NVS and PTCT benefit from continued share capture in SMA, while SUPN remains a beneficiary of broader depression-treatment expansion; APLS gets a valuation backstop from being inside a larger, better-capitalized platform, but the near-term pop is probably already partly priced.

Contrarian view: consensus is treating Leqembi as the sole bridge between old and new BIIB, but the more important question is whether the company can prevent the legacy decline from accelerating faster than guidance. If MS erosion proves only mid-teens rather than worse, the stock likely holds up; if pricing pressure or biosimilar erosion worsens in Europe, the earnings reset could still be another 5-10% lower than current consensus over the next year. The setup favors trading the revisions cycle, not owning the multi-year recovery outright.

Key Decisions for Investors

• Short-term: stay neutral to modestly underweight BIIB into the next guidance cycle; downside risk is a further 5-10% consensus cut over the next 6-12 months if legacy erosion outpaces new-product ramp.
• Pair trade: long NVS / short BIIB over 3-6 months. NVS is the cleaner beneficiary of SMA share shifts while BIIB carries the burden of portfolio transition and estimate risk.
• For event-driven traders: buy BIIB downside puts or put spreads around the upcoming Leqembi initiation decision; if the FDA decision slips or uptake disappoints, the stock can de-rate quickly on slower 2027 growth assumptions.
• Relative-value long SUPN vs short PTCT only on weakness: SUPN has a more scalable commercial leverage profile from the article’s demand commentary, while PTCT faces more direct competitive pressure in SMA and could lag if the category remains convenience-driven.
• Watch APLS as a post-deal integration trade, not a standalone catalyst; only add on pullbacks if management shows credible cross-selling/expense synergy, otherwise the acquisition is more likely to dilute focus than accelerate earnings.