Biogen Boosts on Alzheimer’s News to Win Back Biotech Investors

The approval of a Biogen Inc medicine to treat Alzheimer’s disease by US authorities on Monday could rekindle investor interest in biotech and pharmaceutical stocks, which have underperformed in 2021. After Biogen aducanumab was approved as the first medication to target a likely cause of Alzheimer’s, its stock climbed 38 percent, ending at its highest level in almost six years.

Other firms developing treatments for the mind-wasting disease saw their stock prices rise due to the approval, and key biotech stock indexes saw their best days in months. Investors welcomed the revived focus on biotech and pharma, which had lagged in 2021 as emphasis switched to firms predicted to benefit when the US economy recovers from the coronavirus outbreak.

Gade said Bahl & Gaynor owns Eli Lilly and Co, a pharma whose stock has risen 10% as the company develops an Alzheimer’s medicine similar to Biogen. According to Lipper statistics, the iShares Nasdaq Biotechnology ETF, the second-largest healthcare ETF by assets, rose only 1% in 2021, significantly below the benchmark S&P 500 gain of over 12% the S&P 500 pharmaceuticals index gains of only 4.7 percent.

On the other hand, the Nasdaq biotech ETF gained 3.4 percent on Monday, its most incredible daily percentage rise in seven months. Thanks to Lilly shares, the pharmaceutical index climbed 0.66 percent, surpassing the S&P 500’s 0.08 percent dip. On Monday, Biogen stock increased in value by more than $16 billion. Wall Street analysts have split on aducanumab’s chances for approval ahead of the announcement, resulting in a significant share price reaction on Monday as the decision caught some investors off the surprise.