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.
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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.
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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