Biogen falls in line with S&P500 index

Looking at Biogen stock (NASDAQ: BIIB), we see that it has fallen 16% this year, in line with the broader S&P500 index. However, looking at the longer term, we see that Biogen has actually underperformed the S&P 500, with a 37% decline from 2017 levels. Despite the sharp decline for Biogen, we believe there is only a little room for further growth. We believe that the company's current woes are largely due to the failure of its Alzheimer's disease drug, which has been a major setback. However, we believe that the company's strong pipeline and solid financial position will help it weather this setback and emerge stronger in the long run.

The Biogen stock has fallen 37% since late 2017, primarily due to a 27% decline in its price-to-sales (P/S) ratio. Biogen's revenue has also declined by 12% over the last twelve months, which has offset a significant 31% fall in its total shares outstanding. However, Biogen's revenue per share metric has actually grown by 27% to $73.36, due to the company's share repurchase program.

The future of Biogen's Alzheimer's disease treatment, Aduhelm, is uncertain. The drug has been approved by the US FDA, but its rollout has been much slower than expected. Some experts are not in favor of its approval. Biogen is now conducting a post-marketing trial of Aduhelm, and the data from this trial will determine the future of the drug.

It is clear that Biogen is facing some tough challenges in the coming years. The loss of market exclusivity for their multiple sclerosis drug Tecfidera is a major blow, and the decline in sales of other drugs is also putting pressure on the company. However, Biogen is a large and well-established company, and they will no doubt be able to weather this storm. In the meantime, patients who rely on Biogen's drugs will be hoping that the company can turn things around quickly.

We believe that Biogen's stock is only slightly undervalued at its current price of $201, with a fair value of $215. We think that the market is justified in assigning a lower P/S multiple to the stock than in 2017, given the decline in revenues and the uncertainty around the Aduhelm clinical trials. However, we believe that any positive development from the trials could result in a significant increase in the stock price.

It is helpful to see how Biogen's Peers fare on metrics that matter. You will find other valuable comparisons for companies across industries at Peer Comparisons.

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