The U.S. Food and Drug Administration’s approval of Biogen’s (NASDAQ:BIIB) Alzheimer's drug is unusual. The product is not a cure for the disease. So, when the FDA approved Aduhelm, the stock’s rise may prove temporary.
The FDA’s approval of Aduhelm is positive for the biotechnology industry. Alzheimer’s disease patients have no breakthrough treatments available. So, those suffering from early-stage Alzheimer’s have an option available. The $56,000 annual price tag should add positively to Biogen’s revenue, enabling it to advance its research.
Investors may look at Cassava Sciences (NASDAQ:SAVA), another biotech firm in the neurological disease space. Last month, it participated in a panel discussion on Alzheimer’s Disease.
Seasonal strength may also give the biotechnology sector some positive momentum. As the media continues to provide coverage on Aduhelm’s efficacy and side effects, investors should watch BIIB stock.
Investors should not chase Biogen stock after the rally. The stock already priced in the good news from the FDA after rising around 40% last week. Instead, revisit biotech stocks in the late clinical phases and getting closer to approvals. Biotech investing is a waiting game. Companies with plenty of cash to fund research will reward investors for their patience.
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