Is A Fall Imminent For Biogen Stock After A 30% Rise In A Month?

Biogen stock (NASDAQ: BIIB) has seen a substantial 32% rise in a month, significantly outperforming the broader S&P500 index, down 8%. The rise for Biogen, in particular, can be attributed to success with its Alzheimer’s treatment – Lecanemab – in late-stage clinical trials. Lecanemab removed built-up plaque in the brain called beta amyloid, resulting in a cognitive benefit for patients with early-stage Alzheimer’s disease. ^[1] Biogen also secured regulatory approval for Aduhelm to treat Alzheimer’s disease last year. However, it saw a much slower rollout than anticipated. Aduhelm was considered the prized win for Biogen, but some experts weren’t in favor of its approval. Investors are hopeful that Lecanemab will secure regulatory approvals and drive revenue growth for Biogen over the coming years. Lecanemab peak sales could possibly be as high as $10 billion. For perspective, Biogen’s revenue for the last twelve months period is $11 billion. As such, Lecanemab successful regulatory approvals and rollout will be a big win for Biogen. That said, many positives may already be priced in, given the solid 32% move in a month.

More importantly, what about BIIB stock in the near term?

Now that BIIB stock has seen a rise of 32% in a month, will it continue its upward trajectory, or is a fall imminent? Going by historical performance, there is a very high chance of a decline in BIIB stock over the next month. A move of 32% or more in a month for BIIB has occurred 16 times in the past ten years. Of those instances, none resulted in Biogen stock rising over the subsequent one-month period (twenty-one trading days). This historical pattern reflects a very high chance of a decline in BIIB stock over the next month. See our analysis of Biogen Stock Chance of Rise for more details.

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

• After moving 35% or more over five days, the stock rose on 29% of the occasions in the next five days.
• After moving 26% or more over ten days, the stock rose on 12% of the occasions in the next ten days.
• After moving 32% or more over a twenty-one-day period, the stock rose on 0% of the occasions in the next twenty-one days.

This pattern suggests a very low chance of a rise in BIIB stock over the next five days, ten days, and next month.

Biogen (BIIB) Return (Recent) Comparison With Peers

• Five-Day Return: BIIB highest at 35.1%; AMGN lowest at 0.9%
• Ten-Day Return: BIIB highest at 26.4%; SGEN lowest at -1.6%
• Twenty-One Day Return: BIIB highest at 32.4%; SGEN lowest at -12.1%

While BIIB stock looks like it can see lower levels, it is helpful to see how Biogen’s Peers fare on metrics that matter. You will find other valuable comparisons for companies across industries at Peer Comparisons.

Despite higher inflation and rising interest rates, BIIB stock has seen a 10% rise this year. But can it drop from here? See how low Biogen stock can go by comparing its decline in previous market crashes. Here is a performance summary of all stocks in previous market crashes.

Furthermore, the Covid-19 crisis has created many pricing discontinuities which can offer attractive trading opportunities. For example, you’ll be surprised at how counter-intuitive the stock valuation is for Biogen vs. AGCO.

What if you’re looking for a more balanced portfolio instead? Our high-quality portfolio and multi-strategy portfolio have beaten the market consistently since the end of 2016.

[1] Month-to-date and year-to-date as of 10/4/2022
[2] Cumulative total returns since the end of 2016

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1. Biogen’s Press Release, Sep 27, 2022 [↩]