Biogen Idec (BIIB) is a drug company with significant revenues and solid top- and bottom-line figures. However, analysts note, its performance has priced it to perfection, meaning new growth will need to come from new product launches, along with an ongoing restructuring process.
Biogen Idec is a global biotechnology company that discovers, develops, manufactures and markets therapies for the treatment of neurodegenerative diseases, hemophilia and autoimmune disorders. It creates and markets leading multiple sclerosis therapies, such as Avonex and Tysabri.
Its other major source of revenue is Rituxan, a prescribed monoclonal antibody therapeutic used to treat non-Hodgkin’s lymphoma, rheumatoid arthritis, chronic lymphocytic leukemia and two forms of ANCA-associated vasculitis.
The company generates $5 billion in annual revenues. “A commitment to research is fundamental to our mission at Biogen Idec,” management told investors in a filing.
“Our research and development strategy is to discover and develop first-in-class molecules or best-in-class molecules that improve safety or efficacy for unmet medical needs. By applying our expertise in biologics and our growing capabilities in small-molecule drug discovery and development, we target specific medical needs where new or better treatments are needed.”
Biogen Idec has a market cap of $31.73 billion in a sector, biotechnology, where the average company size is $4.11 billion. Its trailing 12-month P/E ratio is 26.07 and its five-year projected price-to-earnings-growth (PEG) ratio is 1.88, compared to 12.63 for the sector.
Its projected earnings per share growth for the coming year is 16.94 percent, compared to a sector average of 21.34 percent.
Wall Street is bullish on BIIB, with buy or outperform calls in from William Blair & Company, Morgan Stanley, Credit Suisse, Jefferies, Goldman Sachs, Piper Jaffray, Stifel Nicolaus, UBS, Deutsche Bank, RBC Capital Markets, and Oppenheimer & Company.
Standard & Poor’s Equity Research rates the stock a hold. “Our hold recommendation is based on our view that BIIB's current valuation reflects prospects for re-accelerating revenue growth in the coming years,” S&P analysts wrote on May 9, when the stock traded at near $133. Its 12-month target price is $135.
Biogen Idec next reports on May 1, 2013.
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