Biogen Idec (BIIB) posted solid results in the fourth quarter of 2007, driven by solid sales of both Avonex and Tysabri. Tysabri looks set to have a great 2008 given the growing prescriber base and the recent approval in Crohn's Disease.
Biogen's growth will begin to slow dramatically starting in 2010 unless the pipeline can deliver. There are several pivotal programs underway and several more to begin this year. The stock price performance will be determined by just how many of these pipeline candidates move from potential to actual sales. In the meantime, we think investors can be patient.
We are not opposed to owning the name, but we only see $66 as fair value. The name would truly be an excellent take-out candidate for a large-cap pharma name such as Pfizer (PFE), Wyeth (WYE), AstraZeneca (AZN) or Sanofi (SNY). However, the price has to be right for a deal to get done. Biogen's stock is currently trading at 19.0x 2008 EPS, so any deal would be dilutive from a large-cap pharma standpoint. Still, that pipeline and manufacturing capacity looks very intriguing.
Read the full analyst report on BIIB.
Read the full analyst report on PFE.
Read the full analyst report on WYE.
Read the full analyst report on AZN.
Read the full analyst report on SNY.
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