Is it too late to sell Biogen stock after losing an appeal on its multiple sclerosis drug?

By: Motiur Rahman
Motiur Rahman
Md Motiur enjoys researching how companies are solving challenges the world will face over the coming decades. In his… read more.
on Nov 30, 2021
  • Biogen shares on Tuesday edged slightly lower, extending monthly declines closer to 14%.
  • The company lost an appeal on its multiple sclerosis drug, Tecfidera.
  • Its new Alzheimer’s drug was found to have caused brain swelling among 35% of patients in a study.

On Tuesday, Biogen Inc. (NASDAQ:BIIB) shares fell slightly, extending the current monthly declines closer to 14%. The biotechnology company lost an appeal on its multiple sclerosis drug, Tecfidera, with the US Court of Appeals for the Federal Circuits upholding the decision made by a trial court.

Biogen shares are also experiencing pressure from another report released on Monday, showing that its new Alzheimer’s drug caused brain swelling among 35% of patients in a study. 

Are you looking for fast-news, hot-tips and market analysis? Sign-up for the Invezz newsletter, today.

Although the stock has plummeted more than 43% since questions emerged about its new Alzheimer’s drug approval on the 10th of June, the stock is only down 3.89% this year. 

Biogen had spiked sharply on the 7th of June after the Food and Drug Administration (FDA) issued a green light on aducanumab, marketed as Aduhelm.

Is Biogen undervalued? 

From an investment perspective, Biogen shares trade at an attractive forward P/E ratio of 12.46, making the stock an exciting option for value investors.

However, analysts expect its earnings per share to fall by more than 21% this year, before declining at an average annual rate of 6.50% over the next five years.

Therefore, considering the predicaments the company faces regarding aducanumab and Tecfidera, it may be best to monitor developments before buying the stock.

Source – TradingView

Technically, Biogen shares seem to be trading within a descending channel formation in the intraday chart. As a result, the stock has plunged into oversold conditions, creating an opportunity for a technical rebound.

Therefore, investors could target potential rebounds at about $257.35, or higher at $282.59, while $213.93 and $188.53 are support zones.

Where to buy right now

To invest simply and easily, users need a low-fee broker with a track record of reliability. The following brokers are highly rated, recognised worldwide, and safe to use:

  1. Etoro, trusted by over 13m users worldwide. Register here >
  2. bitFlyer, simple, easy to use and regulated. Register here >