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Buy Biogen For Alzheimer's Therapy Pipeline

Aug. 07, 2018 2:21 PM ETBiogen Inc. (BIIB)11 Comments
William Meyers profile picture
William Meyers


  • Some possible Alzheimer's success is now built into the stock price.
  • Disputes about Alzheimer's trial details are muddying the picture.
  • Three candidates with good Phase 2 data means a likely win in Phase 3.

Biogen (NASDAQ:BIIB) has been volatile lately, spiking on possible good Alzheimer's therapy news before pulling back partway. When I last recommended Biogen (Biogen Buy Signal: Alzheimer's Royalties Option) in May the stock was at $272. I concluded the market assumption was that Biogen's Alzheimer's therapies would fail to gain commercial approval, but Biogen management was more confident than the market.

Now that the market has priced in some possible success for Alzheimer's, those negative on the stock are back to their old thesis that the entire Alzheimer's pipeline borders on valueless. They are not without their arguments, but my analysis is that they have a low probability of being completely right. While this article will be about the four Alzheimer's potential therapies, I also believe that the rest of the pipeline, including the new Ionis (IONS) deal, will enrich investors for the next couple of decades, totally apart from the Alzheimer's space.

ChartBIIB data by YCharts

My Working Alzheimer's Therapy Hypothesis

As a biotech investor and writer, I have a working hypothesis about Alzheimer's therapies. I have studied the alternative hypotheses, and while I can't discount them entirely, my investment is based on my best understanding. I will revise it if necessary.

There is no argument that Alzheimer's manifests as memory loss, sometimes including loss of critical and physical abilities. The argument is as to cause, with the mainstream opinion still being that amyloid plaques are the primary physical cause of memory loss.

But what is memory loss? A nerve cell might cease to function, either the whole cell or the most crucial part, the synapses that store memories.

Although the details remain obscure, amyloid plaque buildup, as well as defective tau protein buildup, are associated with memory loss. There could be another initial cause, or some other specific process that damages the

This article was written by

William Meyers profile picture
I provided stock and bond research and analysis to a small cap specialist investor, Lloyd Miller, from 2002 until his death in January 2018. For my own account I invest mainly in technology and biotechnology stocks. My technology and investment web site is openicon.com, where readers can view the notes I take to make decisions and to write articles for Seeking Alpha.

Analyst’s Disclosure: I am/we are long BIIB, IONS. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

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