Why Is Biogen (BIIB) Stock Up 40% Today?

  • An Alzheimer’s drug from Biogen (BIIB) and Eisai (ESALY) yielded positive test results.
  • Consequently, Biogen shares got an upgrade from some analysts.
  • BIIB stock surged 40% soon after the opening bell.
BIIB stock - Why Is Biogen (BIIB) Stock Up 40% Today?

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Today, we have a win-win for everyone except the short sellers. Biogen (NASDAQ:BIIB) and Japanese pharmaceutical firm Eisai (OTCMKTS:ESALY) are co-developing an experimental Alzheimer’s disease drug called lecanemab. Recently released clinical trial results for lecanemab are positive, and BIIB stock is making a swift move to the upside. Not only that, but some Wall Street experts have raised their price targets on Biogen shares.

Unfortunately, Alzheimer’s disease affects around 55 million people globally. A demonstrably effective treatment for this condition has been frustratingly elusive. The Alzheimer’s Association estimates that the population suffering from this disease will reach 13 million by 2050. So, there’s a race to find a treatment.

Thankfully, Biogen and Eisai have some good news to report. According to the press release, lecanemab “slowed cognitive and functional decline in a large trial of patients in the early stages of” Alzheimer’s disease. More specifically, lecanemab slowed the disease’s progress by 27% when compared to a placebo.

What’s Happening With BIIB Stock?

This development warrants celebration from the medical community. There’s no doubt about that. Yet, the elation has also spilled over to the trading floor as BIIB stock zoomed 40% soon after the markets opened.

Let’s not get ahead of ourselves, though. There’s still a long way to go in the ongoing battle against Alzheimer’s disease. To quote Ronald Petersen, director of the Mayo Clinic Alzheimer’s Disease Research Center in Rochester, Minnesota, the lecanemab results indicate “not a huge effect, but it’s a positive effect.”

While the medical implications should be considered with caution, some experts on Wall Street are full-on bullish about Biogen today. For example, Mizuho Securities analyst Salim Syed upgraded BIIB stock from “neutral” to “buy” and raised his price target on the shares from $207 to $270.

Meanwhile, RBC Capital markets analyst Brian Abrahams hiked his price objective from $251 to $321 while assigning Biogen shares an “outperform” rating. With that, Abrahams declared of the lecanemab results that the “positive, statistically significant data across the board looks unequivocal.”

Thus, pretty much everyone is on board with this important joint effort between Biogen and Eisai. We can hope that there will be many more milestones to celebrate as these drug makers wage war against Alzheimer’s disease.

On the date of publication, David Moadel did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

David Moadel has provided compelling content – and crossed the occasional line – on behalf of Motley Fool, Crush the Street, Market Realist, TalkMarkets, TipRanks, Benzinga, and (of course) InvestorPlace.com. He also serves as the chief analyst and market researcher for Portfolio Wealth Global and hosts the popular financial YouTube channel Looking at the Markets.

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