Biogen Shares Grew by 38% after FDA decision

Biogen Shares Grew by 38% after FDA decision

Reading time: 2 min

At the beginning of this week, a super important thing happened: For the first time in eighteen years, US authorities approved a drug for curing the Alzheimer’s disease. The shares of Biogen, the company that produces the drug, as well as the shares of other biotech companies headed upwards immediately. Let’s discuss what’s going on with the market and how long it will last.

FDA approved Aduhelm for treating the Alzheimer’s

On June 7th, the US FDA approved a drug against Alzheimer’s for the first time since 2003. This drug is Aduhelm (aducanumab) created by an American biotech corporation Biogen.

The manufacturer is sure that the drug can not only slow down and stanch the development of the disease that destroys memory and cognition skills but also prevent these processes.

However, note that the regulator requires further studies from Biogen. If the research does not confirm the claimed effect, FDA will forbid selling the drug.

Some details about Aduhelm

  • According to Michel Vounatsos, Biogen CEO, Aduhelm will appear in the market in a fortnight.
  • For the time being, several millions boxes of the drug have been produced.
  • Therapy with Aduhelm will cost about $56,000 a year.
  • According to Reuters, the sales volume might amount to $10-50 billion a year. As you remember, in 2020, the company’s revenue amounted to $12.36 billion.
  • In March 2019, the research was put to a halt after a research failed to confirm the effect. However, in September the work with aducanumab began again.
  • In November 2020, after all the praises devoted to Aduhelm, FDA suddenly claimed it to be poorly efficient.

Biogen shares grew

Mere growth is not the best way to describe what happened. The news that FDA approved Aduhelm just sent the market to the sky. On June the 7th, the stock price of Biogen (NASDAQ: BIIB) leaped up by 38.34%, reaching $395.85 for the first time since April 2015. The high of the trading session was $468.2.

Note that rumors about FDA possibly approving the drug had been heating the biotech sector but modestly. On the first week of June, the quotations of the manufacturer grew by almost 7% to $286.14.

Cowen experts changed the target price of Biogen shares for $400; the Bank of America did the same. Piper Sandler analysts rose it to $384, Oppenheimer – to $450, Jefferies – to $500. According to Tipranks, 46% of questioned experts recommended buying the shares, 54% - holding them, and 0% - selling them.

Shares of other pharma companies are also growing

  • The NASDAQ Biotechnology (NBI) index grew by 3.62% to 4977.3 which is the high of the last months.
  • The quotations of Eisai Co (T: 4523), a Japanese partner of Biogen, grew by 19.35% to 9,251 JPY.
  • The shares of Eli Lilly (NYSE: LLY), another manufacturer of an anti-Alzheimer’s drug, grew by 10.15% to $222.52.
  • The shares of Cassava Sciences (NASDAQ: SAVA) leaped up by 5.35% to $67.59, demonstrating an uptrend for six sessions in a row. Overall growth is 27.9%.
  • The quotations of Annovis Bio (NYSE: ANVS) increased by 7.72% to $73.98. The uptrend has been lasting for the first decade of June, and totally amounts to 64%.

Summing up

The US FDA approved a drug by Biogen called Aduhelm (aducanumab) for curing Alzheimer’s. The shares of this company and its counterparts that are also working on drugs against this disease grew rapidly.

What else to read about pharmaceutical companies' shares on R Blog?

We will post articles based on the best suggestions.


Previous article

Airlines: Illusion of Reliable Investment

Airlines report growth of the passenger flow. This means their revenue will be growing every quarter. But are they worth investing in now? What threatens airlines?

Next article

How to Trade Hanging Man and Inverted Hammer?

This over view is devoted to two reversal patterns from candlestick analysis: the Hanging Man and Inverted Hammer. When they appear on the chart, this means a correction or a reversal might start.