Why is Biogen’s stock so hot right now?
Biogen (NASDAQ:BIIB) is expected to see a significant increase in its stock price later today once the trading halt on its stock is removed following the unexpected FDA clearance of its contentious Alzheimer’s disease medicine aducanumab. Eisai (OTC:ESALY), the biotech’s project partner, is having a great day in the market as a result of this announcement, with the Japanese biopharma’s stock up 45 percent as of 11:24 a.m. EDT Monday morning.
So, what is Aducanumab?
It is the first treatment to be licenced by the FDA to address the underlying cause of this terrible mind-wasting disease, despite the fact that it failed one of its two crucial trials, causing controversy.
According to the Centers for Condition Control and Prevention, over 5.8 million American adults are currently living with this neurological disease, and Wall Street anticipates the medicine to produce over $5.7 billion in revenue by 2027.
That’s fantastic news for Biogen and its investors. After all, during the last year, the biotech has faced strong competition in both its multiple sclerosis and spinal muscular atrophy franchises.
After this historic regulatory approval, is Biogen’s stock a screaming buy? That is a resounding yes. While there are a number of other experimental Alzheimer’s treatments in development across the industry, Biogen should have the market to itself for the time being. This means that, while Wall Street’s initial sales predictions are impressive in their own right, they could be woefully low.
Acuranumab has the potential to earn Biogen upwards of $10 billion per year, making it one of the best-selling medications of all time. With that kind of cash flow, this biotech behemoth should have no issue filling out its pipeline through various business growth initiatives, as well as rewarding shareholders with share buybacks and possibly a dividend in the second part of the decade.
Is it worth it to put $1,000 into Biogen Inc. right now?
You’ll want to hear this before you consider Biogen Inc.
Our award-winning research team recently announced their top ten stocks for investors to purchase right now… and Biogen Inc. wasn’t one of them.
Motley Fool Stock Advisor, an online investing service they’ve been running for nearly two decades, has outperformed the stock market by more than 4X.* And they believe there are ten equities that are better buys right now.