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Investing.com -- Biogen (NASDAQ:BIIB) shares slid around 3% Thursday after Morgan Stanley (NYSE:MS) analysts downgraded the stock from Overweight to Equal Weight and slashed the price target from $285 to $204.

The revision comes as the launch of Biogen's Alzheimer's drug Leqembi has fallen short of expectations. As a result, Morgan Stanley has trimmed its 2024 and beyond revenue estimates for Leqembi by 50%, now projecting worldwide sales of $2.4 billion in 2033, down from the prior estimate of $5.6 billion.

The firm also noted that the growth forecast for 2025 to 2030 has been adjusted to 1% from 4%.

Analysts said they have underestimated the initial reimbursement and logistical headwinds, compounded by the postponement of the subcutaneous formulation of Leqembi, which offers more convenient dosing than the current schedule.

Moreover, a negative opinion from the Committee for Medicinal Products for Human Use (CHMP) has impacted prospects.

They also cited potential near-term challenges from the launch of Eli Lilly (NYSE:LLY)'s Alzheimer's drug Kisunla.

“While we acknowledge we could be downgrading the stock at/near the bottom, we struggle to see an upside path over the next 12 months,” analysts led by Terence C Flynn said in a note.

Still, they acknowledged potential upside drivers for Biogen shares, including the Alzheimer's prevention opportunity with the ongoing Leqembi Phase 3 AHEAD-3-45 trial, Phase 2 data for BIIB080 in Alzheimer's, and the progression of Felzartamab into Phase 3 trials.

Biogen’s management has highlighted ongoing expansion in Leqembi prescribers and early signs of U.S. market acceleration. In Japan, the revenue for Leqembi nearly doubled quarter over quarter.

Regulatory actions for the subcutaneous formulation are expected in mid-2025 and the first quarter of 2026. Despite these developments, Morgan Stanley sees a low likelihood of approval for Leqembi by the European Medicines Agency (EMA) following the CHMP re-examination due this year.

Morgan Stanley also outlined potential risks and opportunities for BIIB. Upside risks include significant Alzheimer's market growth, better-than-expected Leqembi data, and pipeline outperformance.

On the other hand, downside risks involve stronger competition from Kisunla, pipeline failures or delays, and inefficient capital use.

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