Thanks to well-received clinical trial data for its investigational Alzheimer's therapy, lecanemab, shares of Biogen (BIIB -0.11%) are up by more than 51% in the past three months -- and the company hasn't even made a single dollar from the positive findings yet.

But short-term price movements are rarely indicative of a business' long-term value, and in biotech, smart investors know that it pays to be skeptical. So is Biogen stock a buy now that it looks to be one of the winners in the race to develop medicines for Alzheimer's, or is the market getting a bit ahead of itself? 

Lecanemab could be a best-selling drug

Including lecanemab, Biogen has a dozen programs in late-stage clinical trials, all but four of which are being developed for indications in neurology. Its areas of focus within neurology are Alzheimer's disease and Parkinson's disease, though it also has a trio of programs for multiple sclerosis (MS) in development. Six of its eight drugs on the market are indicated for MS, so its expertise in the segment is substantial.

Like its competitors, the business depends on commercializing medicines that bring in enough cash to make up for the hefty expenses of the years-long research and development (R&D) process, including the costs of running clinical trials. The good news is that lecanemab is theoretically capable of doing exactly that.

Analysts estimated that the company's previously marketed Alzheimer's treatment Aduhelm could have made between $8 billion and $10 billion per year if it hadn't crashed and burned shortly after its approval due to problems with its efficacy and its worse-than-anticipated side effects.

Now, it looks like Biogen will have another chance to rake in that same portion of revenue with lecanemab, assuming it passes regulatory review. And considering that the company's sales in 2021 totaled above $10.9 billion, the stakes are high. After all, the drug could eventually lead to the top line roughly doubling in size on its own. If that estimate turns out to be true, getting other pipeline projects out the door would be icing on the cake. 

Per the company's confirmatory phase-three clinical trial data published on November 29, treatment with lecanemab reduced the rate of cognitive decline in patients with early symptoms of Alzheimer's disease when compared to treatment with a placebo. Further, the regulatory filings for lecanemab should be done before the close of the first quarter of 2023.

But its success is far from guaranteed. Here's why. 

Fool me once, shame on you, fool me twice...

The biggest reason why you shouldn't be rushing to buy Biogen is that its data in support of lecanemab might not be all that it appears to be at the moment, which is a substantial risk that medical experts have explicitly called out.

Last year, the company's commercialization of the Alzheimer's therapy Aduhelm took an unpredictable trajectory that was ultimately harmful to shareholders. The drug's efficacy prompted a non-binding advisory committee at the Food and Drug Administration to reject its application for approval, though regulators on the committee with the final say ended up voting to proceed with the approval anyway. 

Then, third-party concerns about the medicine's ability to improve symptoms and reduce the rate of cognitive decline uncovered significant safety issues which made its marginal benefits and outrageous price tag of $56,000 for a year of treatment difficult to justify. Those issues effectively torpedoed Aduhelm's chances at being a commercial success, but not before Biogen's management fought to keep its candidate in the running at every step of the way despite an uproar against them in the medical community.

To be clear, the above has absolutely no bearing on whether lecanemab is safe and effective or whether it will get approved for sale. It's a different drug. Nor does it suggest that Biogen will set an unaffordable price point this time around. 

The point is that the company exacerbated the problems it was having with Aduhelm by doubling down multiple times, only to face defeat anyway when sales were minimal. That doesn't inspire much in the way of confidence in management. And for me, that's a deal breaker when it comes to whether or not to buy Biogen stock, even if there's a chance for things to be different this time around.