Here’s what the firm had to say:
“Despite our belief that Biogen Idec is in the driver’s seat in neurological drug development at a highly productive time in this important area of medicine, the recent and highly provocative BIIB037 data resulted in the stock’s reaching what we believe is a reasonable price target for the next 12 months.”
This portion from the note illustrates quite well why some are calling a bubble in biotechstocks.
The industry is one of the most volatile in the market because investors make big bets on the possibility that a new drug will be in huge demand if it’s able to treat a rare or life-threatening disease. But Stifel noted that even though the results of the test beat investors’ expectations, the tests are still in their very early stages, and “definitive data are years away.”
The sector is up 15.3% year-to-date, compared to 2.6% for the S&P 500 and 6.1% for the Nasdaq, where many biotechs are listed.
Biogen shares were over 1% lower at about $470.60 per share in early afternoon trading on Monday.