Shares of Biogen (BIIB -0.11%) have been volatile in the past few years, largely hinging on success of the company's Alzheimer's treatments. And that's largely because Biogen needs a blockbuster treatment to rally around. Sales in recent years have been declining, and the loss of patent protection for top-selling multiple sclerosis treatment Tecfidera is only exacerbating those concerns.

What will the company's business look like over the next five years, and is it promising enough for investors to buy shares of Biogen today?

A lot hinges on lecanemab

When it comes to biotechs, every company needs a solid treatment that the business can build around -- and that can rally investors. Biogen had high hopes for Alzheimer's treatment Aduhelm but it looks to be a flop, failing to get health officials on board, and even Medicare won't cover it unless patients are using it as part of a clinical trial.

Enter lecanemab, a promising treatment that may prove to be the blockbuster Alzheimer's treatment that could revive Biogen's business. The key difference is that Aduhelm obtained accelerated approval from the Food and Drug Administration (FDA) because of its ability to reduce amyloid beta plaque, which is thought to help Alzheimer's patients. But there are varying views on that result.

By contrast, lecanemab actually showed that it reduced cognitive decline in patients in its phase 3 trials, thus potentially being more effective and less controversial than Aduhelm. If Aduhelm got the go-ahead from the FDA, it seems probable that lecanemab may as well. The key is whether it will be through traditional approval or an accelerated approval like Aduhelm. If it's the former, then that would be a huge win for the company and likely result in Medicare covering the treatment for patients.

Analysts from JPMorgan project that lecanemab may bring in up to $10 billion in revenue at its peak if fully approved. Although Biogen will have to share in the profits (50-50) with its partner, Japanese drugmaker Eisai (OTC: ESALY), it could still be a huge win for the business.

If lecanemab fails, could M&A save the day?

If lecanemab doesn't obtain FDA approval, it's likely that shares of Biogen will tank. Biogen does have multiple phase-three trials, but there's simply nothing as lucrative as a top Alzheimer's treatment. Tofersen, the company's treatment for amyotrophic lateral sclerosis, or ALS, also known as Lou Gehrig's disease, is in phase-three trials -- but even if approved, that may not be a game changer for the business. Biogen's ALS pipeline, at its peak, may only generate annual revenue of up to $1 billion.

What's encouraging for Biogen investors is that the business is sitting on a fair bit of cash, and it's still generating plenty of it. As of June 30, Biogen had $4.8 billion in cash and marketable securities on its books. Over the trailing 12 months, the healthcare company has also generated free cash flow of $2.3 billion.

Using that money to acquire a business to help bolster its pipeline could become a necessary move for Biogen if it fails to develop a blockbuster treatment. Through the first six months of 2022, Biogen's revenue of $5.1 billion declined 6% year-over-year. Sales of Tecfidera and its related brand, Vumerity, was less than $1.1 billion and declined 5% year-over-year.

Should investors buy Biogen's stock?

In five years, Biogen's business will likely look a lot different than today. Sales from Tecfidera will probably continue to decline, and that could drag sales down unless Biogen has a new product to make up for that loss. By then, lecanemab may also be the company's top-selling treatment.

Although Biogen has cash available to make a deal, it's not a mammoth amount that can instantly transform its business, which suggests that going the M&A route won't be a quick way for the business to bring promising new treatments to market. 

Given lecanemab's promising results thus far, I'll take an optimistic approach and say that Biogen should be in better shape five years from now, and that the Alzheimer's treatment will be a key part of its future growth. That being said, I still wouldn't rush out to buy the stock as there's still plenty of uncertainty around the company at this point.