Biogen (BIIB -2.26%) is a business that generates more than $10 billion in revenue each year, with its multiple sclerosis treatments bringing in the bulk of its sales.

But the way the stock trades, it resembles more of a risky biotech than an established business. That's because these days the stock lives and dies by the success of its Alzheimer's treatments. With the company's sales declining in recent years, Biogen needs a catalyst to turn things around and help inject some bullishness behind the business, and having an effective treatment for Alzheimer's could play a huge role in that objective.

Next year could prove to be a pivotal one for Biogen as investors can finally get some much-needed answers about whether lecanemab, a promising Alzheimer's treatment, could be the game changer the healthcare company is hoping that it will be for the business.

Lecanemab: succeeding where Aduhelm failed?

Last year, Biogen's stock soared to more than $400 a share on news that Aduhelm obtained authorization from the Food and Drug Administration (FDA) under its accelerated approval pathway to treat Alzheimer's. That's not full, traditional approval, and it was a controversial decision to say the least, which resulted in some experts from the FDA resigning over it as they weren't convinced of Aduhelm's effectiveness.

The medical community as a whole hasn't been on board with the treatment, and eventually Medicare also said it wouldn't provide coverage for the drug unless it was part of a clinical trial, significantly narrowing the scope under which Aduhelm could be made available to patients. What started out as a success has ultimately ended up being a failure for Biogen.

But lecanemab could be a more promising option, and it's one that has people excited. Unlike Aduhelm, it has actually demonstrated that it can slow the cognitive decline in Alzheimer's patients. Aduhelm obtained approval simply because it reduced amyloid beta plaque, which some experts aren't convinced will lead to better results for Alzheimer's patients. Lecanemab is less controversial, which means it could end up being a more successful treatment for the company.

Awaiting multiple governmental approvals

Japanese drugmaker Eisai is Biogen's development partner on lecanemab, and it hopes that by next year, multiple markets, including the U.S. and Europe, could grant lecanemab full approval and be available to patients. In the U.S., a lot will depend on whether Medicare helps cover the treatment as it could cost as much as $20,000 per year.

Analysts believe that Medicare won't make a decision on coverage until after the FDA decides whether it will approve lecanemab. And if approval does come late next year, sales might still be minimal in 2024. Even if there is a positive result, investors may still end up waiting to see how strong the sales numbers are. In the meantime, that gives other Alzheimer's treatments time to get over the finish line, too.

Should you buy shares of Biogen today?

On Sept. 28, shares of Biogen jumped by 40% on the news of its promising results from lecanemab. Today, the stock still remains up over those levels, suggesting that the optimism behind a potential approval in lecanemab is priced into the stock today. Full approval next year could certainly send the stock to new heights and above its 52-week high of $311.88. 

However, given the risk involved with the stock and how volatile it has been in recent years, it's not an investment I would rush out to buy right now. At 15 times earnings, it is a cheaper buy than the average healthcare stock, which averages a multiple of 23, but I'd argue that with falling sales and uncertainty around lecanemab, it still warrants a lower multiple, perhaps closer to around 10. Therefore, unless you have a high risk tolerance, Biogen might be a stock worth passing on until there's a decision from both the FDA and Medicare on lecanemab, or the stock falls lower.