Biogen (NASDAQ:BIIB) stock ripped higher this week on approval of its Alzheimer’s drug, Aduhelm.

Analysts seemed taken with Biogen’s proposed pricing, $56,000 per year. It’s based on the cost of Alzheimer’s in lost life and nursing care.

A scientific panel refused to endorse the drug last year. The panel voted 8-1 then to say Biogen’s data was uncertain and there wasn’t strong evidence it successfully treated the disease.

Nevertheless, Biogen now has over $20 billion in new market cap it can invest in buying other drug companies or new drugs. Aduhelm targets beta-amyloids thought to be behind Alzheimer’s disease. The company believes 1.5 million people in early stages of the disease could be in the market.

The Alzheimer’s Dilemma

I have a dog in this fight. My mother died of dementia in 2016. It’s a terrible way to go. It takes a long time and the symptoms are horrible. About 3 million people are diagnosed each year with Alzheimer’s dementia, the most common type.

The Alzheimer’s Association notes that Aduhelm is not a cure for Alzheimer’s, just a treatment. It has not been approved for people with advanced cases. Nevertheless it hailed the decision on the drug, whose generic name is aducanumab, as “pivotal.” Its release adds “We expect this will be the first of a number of treatments to come.”

If that’s true, Biogen has a business problem. It already had a political problem. Pricing drugs based on the cost of life rather than the cost of discovery or treatment is not accepted outside the U.S.

A recent study also showed 121 compounds are now in clinical trial for Alzheimer’s. There are 29 in Stage 3 trials, the last before approval is sought. Lately, more trials are focusing on disease pathways other than the amyloid plaques targeted by Aduhelm.

Biogen insists it’s not worried about a backlash to its pricing. Investors should be worried the drug may not work. The FDA said only that Aduhelm was “reasonably likely” to provide benefits. A recent article in the Journal of the American Medical Association said the agency collaborated with Biogen. Critics say the FDA’s objectivity has been compromised. The Aduhelm standard for approval may not last long.

Alternatives to Biogen

While Biogen is up 61% since the FDA decision, the SPDR S&P Biotech ETF (NYSEARCA:XBI) is up just 5%. Analysts expected a bigger reaction throughout the sector. XBI had been down 9% before the decision.

Investors may have good reasons to be wary. There are many better opportunities.

One worth considering is Wegovy, a compound from Novo Nordisk (NYSE:NVO). This was just approved for treatment of obesity. NVO shares are up less than 5% since the Wegovy decision was announced. The Wegovy market is huge. About 70% of U.S. adults are overweight. A 10% loss of weight can reduce the risk of heart disease.

Novo Nordisk, which is based in Denmark, said it will charge about $1,300 per month for Wegovy. That’s in line with the price of its other obesity drug, Saxenda. Saxenda brought in $918 million last year.

Investors might also look at Eli Lilly (NYSE:LLY). Its obesity drug, Tirzepatide, claims superior results in people with both obesity and diabetes.

The Bottom Line on BIIB Stock

If I owned BIIB stock before the FDA announcement I would sell. You don’t have a profit until you have money in the pocket.

I suspect Biogen is overestimating how long it will have this market to itself. I also believe the market is overestimating how long the FDA standard on which Aduhelm was approved will remain in place.

On the date of publication, Dana Blankenhorn did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

Dana Blankenhorn has been a financial and technology journalist since 1978. He is the author of Technology’s Big Bang: Yesterday, Today and Tomorrow with Moore’s Law, available at the Amazon Kindle store. Write him at danablankenhorn@gmail.com, tweet him at @danablankenhorn, or subscribe to his Substack https://danafblankenhorn.substack.com/.