Healthcare company Biogen (BIIB -3.69%) has been a volatile one to invest in over the years, to put it mildly. In 2021, its stock hit a high of well over $400. But it also crashed to a low of barely $187 earlier this year. Sharp movements in the share price have been par for the course for Biogen because news about its Alzheimer's treatments has at different times created bullishness and bearishness.

Have things stabilized for Biogen, and is it a good buy right now, or is there still too much risk involved with the company?

Biogen's sales have been declining along with the share price

Despite what can sometimes appear to be momentary volatility for the stock, shares of Biogen have been trending lower in recent years as the drugmaker's revenue has come under pressure due to the loss of patent exclusivity for its top-selling drug, Tecfidera.

BIIB Chart

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In the third quarter, Biogen had sales of $2.5 billion, a year-over-year decline of 10%. This year, the company anticipates that its top line will come in at about $10 billion, which would be down from nearly $11 billion in 2021.

The company does have 29 projects in its pipeline, including 11 that are in Phase 3 trials. However, its most promising treatments are in Alzheimer's, where the company reported in September that lecanemab slowed cognitive decline by 27%. Excitement around that has been key to the stock's sudden rise over the past few months. 

Why the volatility is likely to continue

A positive reading from a study is encouraging news but all investors need to do is look at the roller-coaster ride that Aduhelm (another Alzheimer's treatment) gave Biogen's stock as evidence that the business is by no means in the clear, and that it may still be a long road ahead.

Lecanemab still isn't over the finish line and although its results are encouraging, the Food and Drug Administration (FDA) hasn't approved the treatment just yet. And it's not just that -- Biogen needs to get doctors on board and convinced that lecanemab, which could cost $20,000 per year, is worth the price tag (strong opposition to Aduhelm was a key reason that treatment has fallen flat despite it obtaining accelerated approval from the FDA). A big piece of that puzzle will be whether Medicare covers it, and news of that likely won't come until after the FDA makes a decision. In short, there are still many decisions in the near future that could drastically affect Biogen's share price and the outlook that analysts have for it.

Lecanemab could in theory generate between $6 billion and $10 billion in revenue, according to some analysts, and so there is a lot riding on whether the approval will come or not. With that kind of revenue, it would have a significant impact on Biogen's business, and so until the FDA makes a decision and until there's clarity on Medicare coverage, investors shouldn't assume that the volatility with this healthcare stock will end anytime soon. 

Risk-averse investors should stay away from Biogen

Biogen isn't necessarily a bad stock to own -- but you need to be aware of the risk that's involved and are comfortable with significant ups and downs.

For many investors, that may not be the case and that's why, in general, this isn't a stock I'd suggest buying right now. Even analysts are cautious -- the average price target of $306 suggests an upside of only a little more than 10%. At a forward earnings multiple of 18, the stock just isn't cheap enough (the S&P 500 average is 19) to compensate investors for the risk they would be taking on today.

Biogen could prove to be a winner next year but with too much uncertainty ahead, investors are better off pursuing other growth stocks.