Biogen Inc: Merck-Allergan Deal Could Send BIIB Stock Soaring

Biogen Inc: Merck-Allergan Deal Could Send BIIB Stock Soaring

Biogen Inc: Merck-Allergan Deal Could Send BIIB Stock Soaring

Biogen Inc Has Something the Pharma Majors Want

Biogen Inc (NASDAQ:BIIB) lost some 10% in one trading day last June. In fact, Biogen stock dropped to its lowest price of the year—$224.60 on June 24. That happened as the company admitted that lab tests of its new multiple sclerosis–targeting drug, “Opicinumab,” failed. But such things happen in the world of biotech.

In fact, Biogen stock has hit a new record high for 2016, gaining 10% in a single day as Merck & Co., Inc. (NYSE:MRK) and Allergan plc (NYSE:AGN) have shown takeover interest. That has sparked.

Still, while Biogen may be willing to reject its bidders, the group has suffered a slowdown in the growth of its flagship drug, “Tecfidera,” a treatment for multiple sclerosis.

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That slowdown prompted the company to engage in a deep restructuring strategy to reduce costs and focus on its strengths, especially in neurology and the treatment of Alzheimer’s disease. This leaves Biogen susceptible to offers it might not be in a position to refuse

Until more news emerges, it would be best to consider Biogen on its own merit. Even after the early August rally, Biogen stock is still trading only 2.45% higher year-to-date. Yet, as we suggested in an article last June, investors should have considered the great Biogen stock’s tumble as a potential bullish opportunity.

In fact, while Opicinumab has failed (for the time being), Biogen also saw three potential blockbusters get approval in Europe and the U.S. just days earlier. These include “Zinbryta” (daclizumab) for multiple sclerosis (MS), and “Flixabi,” which targets arthritis. (Source: “Biogen’s MS drug Zinbryta tied to more serious side effects than Avonex: Advera,” Fierce Pharma, May 31, 2016.)

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