Biogen (NASDAQ:BIIB) has taken its shareholders on a roller-coaster ride over the past year or so, and more potential trouble is on the horizon for the biotech. Given that, now may be a good time for shareholders to consider jumping ship -- at least, so says Bernstein analyst Aaron Gal.

Patent risks and drug approval long shots

Gal believes that Biogen has a 70% chance of losing a patent lawsuit filed by Mylan (NASDAQ:MYL) over the multiple sclerosis drug Tecfidera. Tecfidera is currently Biogen's best-selling product. During the first quarter, its sales accounted for roughly $1.1 billion of its $3.5 billion in total revenue. If the patent in question is invalidated, Tecfidera would face generic competition immediately, rather than in 2028, which could take a major bite out of Biogen's finances. 

Bear standing in front of  a red price chart.

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Further, there's the controversy surrounding aducanumab, a potential treatment for Alzheimer's disease. Biogen discontinued the development of the drug candidate in March 2019, revealing that it had failed to prove effective against the symptoms of Alzheimer's in a phase 3 clinical trial. However, the biotech changed its tune on aducanumab in October after analysis of a larger data set revealed that Alzheimer's patients treated with the drug experienced "significant benefits on measures of cognition and function."

The company said at the time that it would submit a Biologic License Application for the drug "in early 2020," but halfway through the year, Biogen has yet to do so.

The combination of those issues prompted Gal to downgrade the company's stock from outperform (buy) to market perform (neutral). The analyst also cut Biogen's stock price target from $360 to $297, which is less than $1 above where it's trading Wednesday afternoon.

Should investors heed Aaron Gal's advice on Biogen? 

I think so -- or at the very least, I believe Biogen is a high-risk, high-reward play at the moment. Sure, the company could fend off the patent challenge to Tecfidera, and it could also earn regulatory approval for aducanumab. If both of those things happen, Biogen's stock will skyrocket. But if even one of those situations goes the wrong way for the company, its shares will fall off a cliff. How likely is it, then, that Biogen will be successful on both fronts? Not likely, in my view, which is why I think this biotech stock is too risky for most investors.