Biogen stock shot up 40% on Wednesday: find out why
- Biogen Inc reports promising results for its Alzheimer's drug.
- Jim Cramer says use the surge in Biogen stock to take profits.
- Regulatory approval for lecanemab is expected in Jan 2023.
Shares of Biogen Inc (NASDAQ: BIIB) shot up 40% on Wednesday after the biotech firm said its experimental Alzheimer’s drug showed promising results in a Phase III trial.
Why is it a big news for Biogen?
The Cambridge-headquartered multinational makes “Lecanemab” in collaboration with the Japan-based Eisai Co Ltd that also jumped more than 20% this morning.
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About 1,800 patients with early-stage Alzheimer’s participated in the said study that confirmed this drug can help lower cognitive and functional decline by 27% over eighteen months. Biogen will present detailed results of the trial at an Alzheimer’s Research Conference in November.
The stock market news is a big one for Biogen considering 6.5 million people in the United States aged 65 and above are estimated to be living with Alzheimer’s.
Regulatory approval for Lecanemab “could” come as early as January 2023.
What to do with the Biogen stock now?
Biogen stock is still down more than 30% from its high in mid-2021.
Still, Jim Cramer recommends that investors use the surge today to pull out of Biogen instead of betting on a full recovery. On CNBC’s “Squawk on the Street”, he said:
I’m telling members of the CNBC Investing Club it’s time to take profits in Biogen and roll into Eli Lilly. The rollback of the plaque has already been established for Lilly and it does it better.
Also on Wednesday, Salim Syed – Senior Biotech Analyst at Mizuho raised his price objective on the Biogen stock to $270; roughly in line with where it’s trading today. So, that also suggests it might indeed be a good idea to pull out now.