It's looking like 2016 will turn out to be disappointing for Biogen (NASDAQ:BIIB) shareholders. Part of the stock's lackluster performance stemmed from a midstage clinical setback for experimental multiple sclerosis drug opicinumab. The broader slowdown for biotech stocks was another big factor. However, Biogen appears poised to enjoy a much better 2017. Here are three reasons why. 

Jumping Into

Image source: Getty Images.

1. Product launches 

Biogen and partner Ionis Pharmaceuticals (NASDAQ:IONS) expect to launch spinal muscular atropy (SMA) drug Spinraza by early 2017 pending approval. The drug has the potential to be a monster success for the two companies, with analysts projecting peak annual sales of around $2 billion.

Spinal muscular atrophy is a rare disease, and there is no current treatment available. That means Biogen and Ionis should be able to command a premium price, assuming Spinraza wins approval. The drug is expected to list for around $250,000 per year.

Although AveXis (NASDAQ:AVXS) is also developing a potential SMA treatment, the small biotech is still conducting an early-stage study of the experimental drug while planning a pivotal study. Spinraza also has another advantage in that it can treat all three types of SMA, while AveXis' candidate will target treatment of only patients with type 1.  

Another expected product launch could both help and hurt Biogen. Roche (NASDAQOTH: RHHBY) hopes to win regulatory approval for multiple sclerosis drug Ocrevus within the next several days. Biogen stands to reap tiered double-digit royalties from any sales of Ocrevus, but the drug will likely also hurt sales of Biogen's Tysabri. 

2. Bioverativ spin-off

In May, Biogen announced plans to spin off its hemophilia business as an independent, publicly traded company by early 2017. The biotech revealed in August that the name of this new company would be Bioverativ.

Bioverativ should have a good shot at success. Third-quarter sales for the two hemophilia drugs that the new company will market, Eloctate and Alprolix, increased 46% and 30% year over year, respectively. The two drugs have combined for sales of over $600 million in the first nine months of 2016.

Biogen shareholders will own a new company with a great growth trajectory. It wouldn't be surprising to see Bioverativ as an acquisition target down the road. The spin-off will also allow Biogen to focus on its core specialty of developing drugs for neurological indications. Wall Street typically loves spin-offs. I suspect this one will be a success.

3. Pipeline progress

2017 could be a great year for Biogen's pipeline candidates. There are several possible catalysts next year for the biotech's pipeline.

An early-stage study evaluating BIIB074 in treating chronic facial pain disorder trigeminal neuralgia wraps up in February 2017. A phase 2 study of human monoclonal antibody BG00011 in treating ideopathic pulmonary fibrosis is scheduled to complete in the summer of next year, with another phase 2 study of the experimental drug in treating lumbosacral radiculopathy finishing in December. 

Final data collection for the primary outcome of a phase 2 study of experimental Alzheimer's disease drug E2609 is expected in August of next year. This study is being conducted by Biogen's partner Eisai. Another mid-stage study evaluating Tysabri in treating acute ischemic stroke winds up in July. 

What about Biogen's late-stage candidates? Results from a late-stage study of promising Alzheimer's disease treatment aducanumab are still a few years in the future. However, Roche is scheduled to complete data collection for the primary outcome measure for a phase 3 study of Gazyva in treating non-Hodgkin's lymphoma in February. Biogen shares U.S. profits of Gazyva.

Risks

Biogen's prospects in 2017 depend on a lot of things falling into place. The most important of these is approval and successful launch of Spinraza. Barring a major shocker, I don't think that should be a problem.

I don't foresee any real risks for Biogen's stock performance with the Bioverativ spin-off. However, it's entirely possible that the market yawns instead of showing excitement. Regardless, I think the spin-off is a good move for the long run.

The biggest risks of all are with Biogen's pipeline candidates. There's going to be plenty of activity next year, with the potential for both wins and losses. My view is that the biotech will experience more successes than failures with its pipeline, but there's no way to know for sure.

All that being said, my prediction is that 2017 will be a much better year for Biogen than 2016 has been. Wall Street analysts project a potential upside of over 18% for the stock. That sounds about right to me. Biogen's stock seems set to soar in the new year. 

Keith Speights has no position in any stocks mentioned. The Motley Fool owns shares of and recommends Biogen and Ionis Pharmaceuticals. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.