Shares of Biogen Idec (NASDAQ:BIIB) are still climbing in the wake of the Food and Drug Administration’s (FDA) late-March approval of its promising oral multiple sclerosis drug Tecfidera.

In fact, the stock has gained 15% in the last month and 4% in the last week.

But while the stock has had a great run so far — and has strong legs for the drug development marathon — will it keep up? Let’s break down the bullish and bearish arguments.

Bullish

The Approval: Biogen scored a big win with the Tecfidera approval on March 26, which classified the drug as first-line treatment for the disease, meaning it can be used for newly diagnosed patients.

Tecfidera is different than most MS treatments in that it activates Nrf2 — a powerful protein that basically sleeps inside every cell in the human body. When awakened (or activated), Nrf2 bonds to the DNA within a target cell and jump-starts the body’s own defenses against inflammation by helping shut down unstable chains of cell-damaging free radicals. Research suggests that Tecfidera also can boost the central nervous system’s ability to reduce other processes associated with MS.

The drug, which costs nearly $55,000 a year per patient, could net Biogen more than $3 billion in annual sales. The EU is also expected to hand down a decision on the drug in Q2.

Other Drugs: Biogen also boasts a deep portfolio of multiple sclerosis drugs; its three injectibles (Avonex, Tysabri and Rituxan) already account for the lion’s share of the company’s $5 billion in annual sales. Last week, BIIB announced positive phase 2 clinical trial results for its developmental MS drug daclizumab, noting that it significantly reduced brain lesions in patients with the relapsing-remitting form of the disease. In addition to its MS drugs, BIIB has a promising hemophilia A treatment in its drug pipeline.

Good Ratings: Overall, analysts have a “Buy” rating on the stock. RBC Capital on Tuesday maintained an “Outperform” rating on Biogen and raised its price target from $180 to $215. JMP Securities initiated coverage of the stock on March 28 at “Market Outperform” with a price target of $203.

Bearish

Competition: Biogen is not the only company focused on MS treatments … and the competition is certain to heat up. San Francisco-based Receptos, which filed for an $86.3 million IPO last week, is in Phase 2 trials with a promising oral drug; top line results in the trial are expected in mid-2014. And while drug pipelines are no sure bet, Receptos is being bankrolled by a couple of Big Pharma’s biggest guns: Eli Lilly (NYSE:LLY) and Johnson & Johnson’s (NYSE:JNJ) Ortho McNeil Janssen unit.

Plus, the market already includes other pill-based MS treatments: Novartis’ (NYSE:NVS) Gilenya as well as Aubagio from Sanofi’s (NYSE:SNY) Genzyme unit.

Valuation: At around $200, BIIB has gained 60% in the past year and set another 52-week high. Thus, it has a PEG ratio of 1.37 and a forward P/E of 21, both indicating that it’s overvalued. That P/E is higher than biopharma peers Celgene (NASDAQ:CELG) and Gilead Sciences (NASDAQ:GILD) which hover around 18. Plus, Novartis and Sanofi trade at the far lower multiples of 13 and 8 respectively.

Bearish Options: Options traders appear to be betting against the stock in the short run, according to a report from Schaffer’s Investment Research on Monday. There are nearly twice as many puts than calls on options set to expire in the next three months.

Bottom Line

With both sides laid out, the only question that remains is that of the verdict. All in all, there’s a lot to like about Biogen. It has a powerful MS franchise, a promising new candidate for the hemophilia A treatment market and the Nrf2 element of Tecfidera potentially has broader applications for other tough-to-treat conditions that ravage the central nervous system.

Such strengths definitely outweigh competition and other bearish factors. In the end, Biogen still looks attractive despite the run-up … but investors shouldn’t expect too much in the short-term.

As of this writing, Susan J. Aluise did not hold a position in any of the aforementioned securities.