Analysts are going crazy for this biotech company after results from an Alzheimer's trial

Analysts are loving the latest news out of Biogen.

On Friday, the company announced results on a test drug called aducanumab for Alzheimer's disease.

Here's the key result, from the release:

"Treatment with aducanumab produced a dose- and time-dependent reduction of amyloid plaque in the brain. Amyloid plaque is believed to play a key role in the development of the symptoms of AD (Alzheimer's disease)."

When the drug was tested at a high dose, it showed a 71% reduction in the plaque after 54 weeks compared to the control drug. Investors had been expecting a 30% reduction, according to TheStreet's Adam Feuerstein. These percentages are measured by the Clinical Dementia Rating the industry uses.

Shares were up about 6% to around $460 a share in early trade on Friday.

And analysts think shares could power even higher.

In a note on Friday, Barclays raised its price target to $500 from $435, a 15% increase, and keeps an "Overweight" rating on the stock. 

Piper Jaffray also has a price target at $500 and also rates Biogen shares "Overweight."

At $500 per share, the company would be worth over $117 billion; its current market cap is $101 billion.

This portion of Piper Jaffray's note explains why biotech stocks in general can be so eye-popping:

"With millions of people in the U.S. with Alzheimer's, these drugs have the potential to become the biggest pharmacological class of all time. The urgency to diagnose accurately and treat should create a massive swell of demand for any product deemed to have an attractive profile."

Essentially, investors take huge risks on biotech companies by betting that their treatments would eventually create a drug that cures a rare or terminal disease. 

And the industry has been one of the best performing; it's up nearly 16% year-to-date and over 32% in the last 12 months. The S&P 500, in contrast, is up about 2% this year and 12% over the last 12 months.

But these soaring prices are precisely what has some on Wall Street worried that the sector is in a bubble. Even Federal Reserve chair Janet Yellen, in comments about stock valuations to Congress last year, singled out biotech and technology stock valuations as being "substantially stretched." The industry has rallied by more than 50% since then.

But the thing with bubbles is no one really knows until it pops.