For the past year, Biogen (BIIB) was the dog’s dinner after a failed launch of its Alzheimer’s drug, Aduhelm; but stellar results from a late-stage drug trial for lecanemab, a new drug for treating Alzheimer’s, has breathed new life into the company, notes Mike Cintolo — growth stock expert and editor of Cabot Top Ten Trader.

Biogen and its partner — Tokyo, Japan-based Eisai Co. Ltd. (ESALY) — recently announced that lecanemab showed promise in slowing the rate of cognitive decline in Alzheimer’s patients versus a placebo.

The drug targets a plaque that accumulates in the brain and contributes to the disease, and patients who took it in trials saw a 27% average reduction in the plaque, suggesting that Alzheimer’s can be slowed in its early symptomatic stage.

Biogen and Eisai had already applied for accelerated FDA approval for the drug (a decision is expected by early January), with plans to pursue full approval using the latest data. The clinical results sent Wall Street scurrying to upgrade the stock (a reason for the strength), with at least three major institutions upping their price targets for the company.

Biogen is also focused on growing its biosimilars division; last week European authorities accepted its marketing application for Actemra, which is indicated for several autoimmune diseases, including rheumatoid arthritis (the drug is also used to treat adult Covid patients who are under systemic corticosteroids and require respiratory support).

All told, Biogen’s pipeline includes 27 drug candidates in various stages of testing for maladies including insomnia, depression, multiple sclerosis and Parkinson’s. On the financial front, the company is highly profitable, though numbers have been shrinking for a while, but investors may start looking ahead to lecanemab sales down the road.

Technically, BIIB soared in June 2021, peaking at $468, after the FDA granted accelerated approval of Aduhelm — but shares quickly returned to earth on the back of the drug’s commercial failure. The stock continued its waterfall decline into this year before finally hitting bottom at $188 in May.

Four months of base-building followed, which set the stage of the latest blast-off on overwhelming volume (13x average) on the lecanemab news. It’s higher risk, but if you’re aggressive, we’re OK taking a stab on BIIB on dips; our suggested buy range is $255 to $262.

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