A top Wall Street firm is recommending that investors buy Biogen because of a promising pipeline of drugs it is developing to treat Alzheimer's disease.
Biogen shares rose 4 percent shortly after Thursday's market open.
Morgan Stanley raised its rating for Biogen shares to overweight from equal-weight, citing the potential of the company's upcoming therapies.
Biogen has a "differentiated pipeline with Alzheimer's as the lead," analyst Matthew Harrison wrote in a note to clients Thursday. It's Aducanumab drug "has established proof of concept and allows us to value the program," he added. "We continue to see the R&D engine at Biogen as a strong LT driver of growth."
The biotech company has underperformed the market in the previous 12 months. The shares are up 10.4 through Wednesday compared with the S&P 500's 17.5 percent return.
Harrison raised his price target for Biogen to $375, which is 19 percent above Wednesday's closing price. His old target was $311.
"Biogen currently has several Alzheimer's therapies in development," he wrote. Its Alzheimer's disease pipeline "remains a must-own catalyst."
In addition to Aducanumab, Biogen's developing drug pipeline includes BACE inhibitor E2609, anti-amyloid antibody BAN2401, BIIB076 and the anti-tau therapy BIIB092. He said Aducanumab's trial results will be released in late 2019 or early 2020.
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— CNBC's Michael Bloom contributed to this story.