On Tuesday, Biogen Inc. (NASDAQ:BIIB) shares fell slightly, extending the current monthly declines closer to 14%. The biotechnology company lost an appeal on its multiple sclerosis drug, Tecfidera, with the US Court of Appeals for the Federal Circuits upholding the decision made by a trial court.
Biogen shares are also experiencing pressure from another report released on Monday, showing that its new Alzheimer’s drug caused brain swelling among 35% of patients in a study.
Although the stock has plummeted more than 43% since questions emerged about its new Alzheimer’s drug approval on the 10th of June, the stock is only down 3.89% this year.
Biogen had spiked sharply on the 7th of June after the Food and Drug Administration (FDA) issued a green light on aducanumab, marketed as Aduhelm.
Is Biogen undervalued?
From an investment perspective, Biogen shares trade at an attractive forward P/E ratio of 12.46, making the stock an exciting option for value investors.
However, analysts expect its earnings per share to fall by more than 21% this year, before declining at an average annual rate of 6.50% over the next five years.
Therefore, considering the predicaments the company faces regarding aducanumab and Tecfidera, it may be best to monitor developments before buying the stock.
Source – TradingView
Technically, Biogen shares seem to be trading within a descending channel formation in the intraday chart. As a result, the stock has plunged into oversold conditions, creating an opportunity for a technical rebound.
Therefore, investors could target potential rebounds at about $257.35, or higher at $282.59, while $213.93 and $188.53 are support zones.
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