What Will Biogen Stock Look Like in 5 Years?

Biogen Stock

Biogen stock (NASDAQ:BIIB) has been volatile in recent years, with much riding on the success of the company’s Alzheimer’s medicines. This is partly due to Biogen’s need for a blockbuster drug to rally behind. Sales have been falling in recent years, and the loss of patent protection for the top-selling multiple sclerosis drug Tecfidera is increasing those fears.

What will Biogen’s business look like in the next five years? Is it promising enough for investors to purchase Biogen stock (NASDAQ:BIIB) now?

Biogen Stock: A lot is Riding on Lecanemab.

When it comes to biotechs, every firm needs a viable solution that can be built around – and that can entice investors. Biogen had great expectations for Alzheimer’s drug Aduhelm, but it seems to be a disappointment, failing to get approval from health regulators and even Medicare, which would not pay it unless patients use it as part of a research study.

Enter lecanemab, a promising medication that might become a blockbuster Alzheimer’s medicine, reviving Biogen’s company. The significant distinction is that Aduhelm received fast FDA clearance because of its potential to lower amyloid-beta plaque, which is expected to aid Alzheimer’s sufferers. However, opinions on the outcome differ.

JPMorgan analysts estimate that lecanemab may generate up to $10 billion in revenue if completely authorized. Although Biogen will have to split revenues with its partner, Japanese pharmaceutical Eisai (OTC:ESALY), the deal might be a big gain for the company.

What’s promising for Biogen stock (NASDAQ:BIIB)  investors is that the company has a lot of cash on hand and is still producing a lot of it. Biogen has $4.8 billion in cash and marketable securities on its books as of June 30. The previous year, the healthcare firm also produced $2.3 billion in free cash flow.

If Biogen fails to create a blockbuster medicine, using that money to purchase a company to help improve its pipeline may become a critical option. Biogen’s sales of $5.1 billion were down 6% year on year in the first six months of 2022. Tecfidera and its linked brand, Vumerity, generated less than $1.1 billion in sales, a 5% decrease year on year.

Should Biogen Stock Be Purchased By Investors?

Biogen’s company will most certainly look quite different in five years. Tecfidera sales will continue declining, dragging down overall revenues until Biogen introduces a new medication to compensate. By that time, lecanemab might be the company’s best-selling medicine.

Although Biogen has cash on hand to make a purchase, it is not a large sum that will suddenly alter the company, implying that following the M&A path will not be a speedy method for the company to bring potential new medicines to market.

Given lecanemab’s excellent outcomes so far, I’ll take an optimistic approach and predict that Biogen stock (NASDAQ:BIIB) will be in better form in five years, with Alzheimer’s therapy playing a crucial role in its future growth. Having said that, I wouldn’t rush out to purchase the stock since there is still a lot of uncertainty around the firm at this stage.

Featured Image-  Megapixl @ Doityourself13 

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About the author: Okoro Chinedu is a freelance writer specializing in health and finance, with a keen interest in cryptocurrency and blockchain technology. He has worked in content creation and digital journalism. Since 2019, he has written on various online platforms, and his work has been recognized by several important media sources and specialists in finance and crypto. In addition to writing, Chinedu enjoys reading, playing football, posing as a medical student, and traveling.