Drugmaker Biogen (BIIB 0.78%) is coming off a strong quarter, where it beat expectations and raised its guidance for the full year. While in many cases that might put a stock on a great path, the reality with Biogen is that there is still plenty of risk, namely to do with its Alzheimer's drug, Aduhelm.

Here's why despite the company's strong performance and outlook, I would steer clear of the stock, at least for now.

People working in a lab.

Image source: Getty Images.

The increase in guidance isn't significant

Biogen released its third-quarter results last week. The company's adjusted earnings per share (EPS) of $4.77 for the period ended Sept. 30 beat analyst expectations of $4.09. In addition, Biogen also raised its guidance for 2021 and is now expecting revenue to come in between $10.8 billion and $10.9 billion for the full year (up from a previous estimate of $10.65 billion to $10.85 billion). And adjusted EPS is expected to range between $18.85 and $19.35 (vs. $17.50 to $19.00 previously).

At first glance, that's promising news for the company. And the heightened guidance is with what the company says will be minimal revenue from its Alzheimer's drug, Aduhelm. In Q3, sales from the drug totaled just $0.3 million, contributing a nominal amount to the company's product revenue, which was more than $2.2 billion. Meanwhile, sales from its top-selling multiple sclerosis drug, Tecfidera, declined 47% year over year to less than $500 million -- and the company expects to see those numbers continue falling due to growing competition.

Given that the company is expecting sales of its top drug to fall and Aduhelm to contribute a minimal amount this year, it's a bit surprising that Biogen is still raising its guidance for the year. But for long-term investors, the important question is how the company will do beyond just 2021, and that's not clear at all.

There's still lots of uncertainty about Aduhelm

Biogen projects that revenue from the Aduhelm will "start ramping in 2022 and beyond" -- but that will depend on a Medicare National Coverage Determination (NCD). If the NCD is positive, that will mean coverage under Medicare and easier access by patients to the drug, which costs $56,000 per year. The company says it expects a draft decision of the NCD by January followed by a final decision in April.

Plus, investors shouldn't forget that the drug still needs to undergo a phase 4 confirmatory trial. Although the U.S. Food and Drug Administration (FDA) did approve Aduhelm, it was under an accelerated approval pathway, which requires another trial. That, too, creates some risk as the FDA could decide to backtrack its approval if the results are underwhelming.

And there was significant controversy in that approval, with the FDA giving the drug a green light despite its advisory committee recommending against doing so. Several members from the committee even quit over the decision.

Until the trial is complete, there's going to be some risk surrounding Aduhelm's future. And although the company stated on its recent earnings call that it plans to complete the phase 4 trials ahead of schedule, it did not specify a date as to when the results might become available.

The safest option is to wait

There were significant problems with Biogen's latest quarterly results despite what seemed like a good performance overall. Aduhelm's sales were underwhelming and revenue from Tecfidera is in a free fall. The stock is simply too risky a buy and trades at a price-to-earnings multiple of 26 -- about the same as the average stock in the Health Care Select Sector SPDR Fund. For a company that faces the risks and uncertainty that Biogen does, its stock should be trading at more of a discount.

Even if you're optimistic about Biogen's future, you may be better off waiting until next year -- or at least until its phase 4 trial results come out and after a positive NCD from Medicare. Any earlier than that, and you could be taking on significant risk with a stock that's already proven to be extremely volatile this year, ranging between $223 and $468 (after Aduhelm was approved). Right now, patience is the watchword.