BeiGene Stock Rises 46% In A Month But Will The Rally Continue?

The stock price of BeiGene (NASDAQ: BGNE), a biotechnology company focused on developing molecularly targeted and immuno-oncology drug candidates, has seen a rise of 46% over the last twenty-one trading days, while it is up 54% year-t0-date.  The recent rise in the stock can be attributed to the U.S. FDA’s approval for BeiGene’s blood cancer drug – Brukinsa –  for Waldenström’s Macroglobulinemia (WM), a rare type of blood cancer. Note that Brukinsa was already approved as a second-line treatment for mantle cell lymphoma. And now with its recent approval for WM, the drug’s peak sales estimates are likely to be revised higher from an earlier $2.5 billion in 2025. This has boded well with the investors, evident from the large stock price appreciation. 

But now that BGNE stock has seen a large 46% move over the last month or so, will it continue its upward trajectory, or is a fall imminent? Going by historical performance, there is a strong chance of a decline in BGNE stock over the next month. Out of 45 instances in the last six years that BGNE stock saw a twenty-one day rise of 46% or more, 38 of them resulted in BGNE stock falling over the subsequent one-month period (twenty-one trading days). This historical pattern reflects 38 out of 45, or about an 84% chance of a fall in BGNE stock over the coming month. See our analysis on BeiGene Stock Chance of Decline for more details.

Calculation of ‘Event Probability‘ and ‘Chance of Rise‘ using last ten years data

• After moving 11% or more over a five-day period, the stock rose in the next five days on 54% of the occasions.
• After moving 20% or more over a ten-day period, the stock rose in the next ten days on 37% of the occasions
• After moving 46% or more over a twenty-one-day period, the stock rose in the next twenty-one days on 16% of the occasions.

Predict average return on BeiGene, (BGNE) Stock Return: AI Predicts BGNE Average and Excess Return After a Fall or Rise

BeiGene, (BGNE) Stock Return (Recent) Comparison With Peers

• Five-Day Return: CLVS highest at 12%; ADAP lowest at -7.4%
• Ten-Day Return: BGNE highest at 20%; SPY lowest at -2.6%
• Twenty-One Day Return: BGNE highest at 46%; SPY lowest at 0.4%

While BGNE stock may see lower levels, 2020 has created many pricing discontinuities which can offer attractive trading opportunities. For example, you’ll be surprised how counter-intuitive the stock valuation is for Merck vs. Regeneron