2 Reasons to Invest in Biogen Stock Right Now

Biotechnology stocks had a rough start to the year, but many are starting to regain lost ground. Despite this, Biogen (BIIB) shares remain weak, partly due to the company’s dismal phase 2 results for its hyped MS drug, opicanumab.

While the drug’s failure is a concern, there are two good reasons to hold onto Biogen’s stock for the long-term.

Scientific research

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1.     More Drugs in the Pipeline

Part of the reason why Biogen shares are still weak is because many investors speculate that the company’s days as king of multiple sclerosis treatments are numbered. Despite holding a 38% share of MS treatments, the company’s MS drug sales only increased by 2.4% in Q1.

Competing MS drugs are growing at a much faster rate, which is obviously concerning for investors.

But Biogen has other drugs in the pipeline. The company licensed a drug with the same target group as Gilenya last fall, which has the potential to be Biogen’s next blockbuster drug.

The company is also working on an Alzheimer’s drug.

2.     Solid Balance Sheet

Despite slower sales growth, Biogen maintains a solid balance sheet. In March, the company’s cash and stockpile was $6.8 billion.

Biogen has implemented new cost cutting measures, and with sales of Tecfidera now contributing to the company’s bottom line, any additional earnings this year will only contribute to Biogen’s financial firepower.

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Daniel Simmons