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Stock Pick of the Week with Momentum Securities: 17 June - Biogen

17 June 2021 Momentum Securities

Momentum’s leading stockbroking division – Momentum Securities – will be bringing you their Stock Pick of the Week, each week on a Wednesday or Thursday.

The stock pick motivation is available as written content and a downloadable video and audio clip.

This week’s pick: Biogen Inc.
About: Biogen Inc. is an American multinational biotechnology company based in Cambridge, Massachusetts, specializing in the discovery, development, and delivery of therapies for the treatment of neurological and neurodegenerative diseases to patients worldwide.

Portfolio Manager for Momentum Securities, Wian van Wyk shares his insight on Biogen.

Click here to download:

• the audio clip
• the video clip.

“This weeks’ stock pick needs no introduction as it has been in the spotlight over the last week due to the controversial decision made by the FDA to approve Biogen's new drug that is used in the treatment of Alzheimer's. Due to this, the discussion will be more focused around as to why we have decided to sell the holdings of Biogen after we have seen an increase in the share price of around 48% within the last month.

We held around 1.9% of Biogen within our global equity portfolio and here are some of the justifications as to why we have decided to start selling this share:

- The FDA approval of the Alzheimer's drug has been a long awaited catalyst, which has been seen in the sharp increase in the share price that we are experiencing currently.
- We struggle to see a further catalyst post the approval, with many resources having already been dedicated to the approval of this drug.
- We believe the share price has reacted accordingly and the upside is now priced in.

Three of the current FDA members have resigned after the approval of the drug on the respective panel of 11 members. Due to the fact this mentioned, we are comfortable taking profits within Biogen and selling our holdings within the company.”

Quick Polls

QUESTION

Healthcare brokers have long complained about inflation-plus medical scheme contribution increases; but pandemic may have changed things. What will pandemic-induced changes in hospital utilisation do to medical scheme contribution increase patterns?

ANSWER

Below inflation increase for 2022, then back to inflation-plus
Long-term trend of below inflation increases
Inflation-linked hikes for 2022, then back to inflation-plus
This is a 2-year hiccup, inflation-plus increase trend remains in place
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