Biogen (NASDAQ:BIIB) shares resumed trading at 1:30, and are surging more than 41% to $403.70 in afternoon trading. Shares had been halted for nearly three hours, just before the FDA announced the approval of the company’s Aduhelm (aducanumab) for Alzheimer’s disease.
Biogen StockShould You Buy?
The new drug is approved for patients with mild to moderate AD in a 1:1 ratio. Following a tumultuous 2016, Biogen investors are breathing a sigh of relief today that the company has finally moved its Alzheimer’s franchise forward. The company’s multiple sclerosis franchise is set to rise in importance as the biotech’s drugs are able to gain a share of the massive $25 billion MS market, the biggest in the world. My work has been covering biotech stocks for more than 25 years, and the last five or so years have been my most active as I’ve successfully cashed out at huge profits. Today Analysts want to look at Biogen to see if it’s still a good investment opportunity for 2017. Biogen’s R&D Star Biogen was one of the first biotech stocks to jump higher this year.
Biogen’s share price
Biogen’s ADUCAUL (aducanumab) is an antibody-drug conjugate that targets tau, an important aggregating protein in the central nervous system. The antibody attaches itself to tau, leading to the disabling and death of nerve cells in the brain. ADUCAUL is given intravenously once every three months. At the center of the hyper-competitive anti-amyloid space is Biogen and its partner EisaAnalysts (OTCPK:ESALY), which received regulatory approval for BAN2401, which is its anti-amyloid agent for treatment of Alzheimer’s disease. “We welcome the FDA approval of BAN2401, which marks the first approval for a medicine that effectively engages tau-specific pathways, including biomarkers, in Alzheimer’s disease,” said Tony Hooper, Biogen’s senior vice president and head of neuroscience product development.
Biogen’s market performance
Shares of Biogen, which has traded as high as $420.46 and a low of $304.83 this year, have performed better than any of its large-cap peers since the FDA announced its Biogen-Neurocrine collaboration and the New Drug Application for BAN2401 (recombined efficacy): BIIB data by YCharts Alzheimer’s drug approval is a great long-term catalyst. The market has largely forgotten BAN2401, given that it could be 10 years or more until Alzheimer’s drugs reach the market. But with approval in hand, the clinical data supporting BAN2401 looks robust, and management plans to submit the application to the FDA for approval of BAN2401 as a treatment for patients with mild to moderate Alzheimer’s disease.
Aducanumab is a potential blockbuster. Several other companies are currently racing to develop a preventive treatment for Alzheimer’s disease, such as ElAnalysts Lilly (NYSE:LLY) with solanezumab, or Johnson & Johnson (NYSE:JNJ) with bapineuzumab. Lilly’s drug recently suffered a setback, when it failed a second phase 3 study. Its drug, solanezumab, still hopes to win approval as a first-line treatment, but the fate of ElAnalysts Lilly’s drug now seems in doubt. But while ElAnalysts Lilly continues to work on its own Alzheimer’s drugs, Biogen expects its recently approved Aducanumab to be a significant driver of future growth for the company. Biogen’s growth is partly powered by its big-selling multiple sclerosis drugs, Tecfidera and Tysabri.
Shares are up 40% this year. Here’s why Analysts think this sell-off is overblown. Analysts reiterate BUY recommendation on Biogen. When shares dipped below $300 in November, Analysts wrote this article. Analysts upgraded Biogen from a SELL to a STRONG BUY on May 5. The reason? The stock looked set to have another major leg up. Here are some of the reasons: The Spinraza biosimilar had failed to gain approval from the FDA. The shares were much too cheap. Analysts recommended an out-of-the-money put option to profit from this decline. Although Biogen fell to $272.49 after that article, shares were still very cheap. At the time, the P/E was 15.0 and the dividend yield was 4.1%. Biogen is a very strong company.