Biogen – Ahead of Q2 Earnings on Thursday Print E-mail
By Brian Wilson-Lead Contributor   
Tuesday, 23 July 2013 12:12
Despite continuing strength in the biotech sector, Biogen Idec (NASDAQ: BIIB) has been unable to attain new highs due to the excessive hype over the commercialization potential of new multiple sclerosis drug Tecfidera (dimethyl fumarate) earlier in the year. Although the company is still up 55% since the start of 2013, investors seem to be questioning the sustainability of the company’s momentum.

Despite the historically cheap valuation multiples, there is some skepticism that Tecfidera in particular will be able to meet or outperform guidance set by the company in their Q1 2013 earnings call (somewhere between 16-18% in growth). There is also major concern over the patent protection of Tecfidera in the EU due to the existence of dimethyl fumarate as a treatment for psoriasis. Tecfidera is also priced significantly higher than dimethyl fumarate at $54,900 per patient per year.

AVONEX® (interferon beta-1a), TYSABRI® (natalizumab), and RITUXAN® (rituximab) are Biogen’s other primary drugs in the MS indication. These three brought in the vast majority of the company’s $1.4 B in quarterly revenues ($736 million, $275 million, and $288 million respectively), which represents what should be the lion’s share of the ~$10-15 B US MS drug market. The three drugs also saw in 13%, 9%, and 7% year-over-year growth respectively.

According to Bloomberg’s analyst data, the average EPS estimate for Q2 2013 is $1.93 per share – slightly lower than the number reported in Q1 2013. If the company surprises the street, it seems likely that BIIB would make another attempt at its 52-week high of $242.64 per share given that the biotech sector continues its current strength.

Tecfidera has also come under a bit of scrutiny recently after the death of a 59 year old woman who was on the drug, although it was discovered that she had pneumonia and had been off the drug for 2.5 weeks at time of death. The drug seems to be in the clear, although investors are still skeptical of third party prescription data for the drug.

Investors will now look forward to the company’s upcoming Q2 2013 earnings release, which is scheduled to take place at 8:00 AM EDT on Thursday, July 25th, 2013.




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