Acumen Pharma (ABOS) Stock Soared 87% on Biogen's Results

Key points:
Acumen Pharma (ABOS) stock soared 87% on Biogen Alzheimer’s results.
The rally was triggered by a positive investor note from a Stifel analyst.
However, there are significant differences between the two stocks.

The Acumen Pharmaceuticals Inc (NASDAQ: ABOS) stock price soared 87% after an analyst at Stifel Financial Corp. noted that the positive data from reported from Biogen’s (BIIB) and Eisai’s (ESALY) Phase 3 Alzheimer’s trial for lecanemab, is bullish for Acumen.

Paul Matteis, an analyst at Stifel, noted that the positive results would benefit Acumen’s lead drug candidate, ACU193, which has a similar formula to lecanemab. ACU193 is currently in a phase 1b clinical trial, and the antibody has a “meaningful mechanistic overlap” with lecanemab.

Also read: The Best Biotech Penny Stocks Under $5 To Buy Right Now.

Investors cheered the news as they bought Acumen shares, which are much cheaper than Biogen. The lower price of ABOS shares made them more attractive to retail traders with small accounts who cannot buy many Biogen shares.

At writing, over 7.85 million Acumen shares had changed hands as investors bought its shares. However, investors should remember that Acumen’s drug candidate is in phase 1b clinical trials, while Biogen’s has just completed phase 3 studies and is ready to be commercialised.

Therefore, it will take time before the company can complete phase II and III clinical studies. There are no guarantees that the drug shall pass the remaining clinical trial stages. After today’s announcement, Acumen’s drug candidate has to yield better data. Otherwise, it will not offer competition to Biogen’s lecanemab.

However, Matteis is optimistic that Biogen’s CLARITY data “may reinvigorate some enthusiasm” for the amyloid proteins space, which I mentioned in my article on Biogen’s impressive phase three clinical trial results for lecanemab. As a result, Matteis reiterated his Buy rating on Acumen Pharma’s (ABOS) stock with a price target of $17, which is quite optimistic.

So, should you buy Acumen (ABOS) stock? The short answer is no. It is never a good idea to chase a stock higher, especially after a massive rally. Such rallies are usually followed by pullbacks, which offer better entry opportunities.

*This is not investment advice.

The Acumen Pharma (ABOS) stock price chart.