Biogen Idec IncBIIB

Morningstar Rating

Stock Research and Analysis

by Karen Andersen, CFA

Biogen Idec enjoys steady profitability from two MS products and cancer drug Rituxan. We think Biogen's specialty-market-focused drug portfolio and pipeline create a wide economic moat, and that Tecfidera will only increase the firm's dominance in the Read more

Bulls Say

With two successful marketed drugs to treat MS, Biogen is the leader in the field, and emerging diagnostics could help Biogen target both Avonex and Tysabri at patients likely to see strong efficacy and minimal side effects.

Tecfidera's safety and efficacy profile, as well as its oral administration, could make it the go-to option for first-line MS patients, allowing for multibillion-dollar peak sales potential.

Biogen expects to launch two hemophilia drugs in 2014, which should help diversify revenue and further boost sales growth sparked by Tecfidera.

Biogen's midstage neurology and immunology pipeline is bolstered by strong collaborations (like the spinal muscular atrophy program through Isis) as well as products with novel targets (like anti-LINGO for MS). Read more

Bears Say

Avonex is losing its edge as the leading MS drug, as similar competitors nip at its heels and as novel oral therapies, such as Novartis' Gilenya and Sanofi's Aubagio, enter the market.

Tysabri's efficacy could be overshadowed by worrisome side effects as additional cases of PML are reported in Tysabri users and as patients who test positive for the JC virus antibody discontinue therapy.

Biogen's margins get a boost from the firm's Rituxan profit-sharing agreement with Roche. Unless next-generation version GA101 surpasses Rituxan's efficacy, this revenue stream could begin to dry up if biosimilars launch when U.S. patents expire (2018).

Xenoport is developing a product similar to Tecfidera. If it proves equally effective several years from now, it could dilute some of Biogen's long-term growth from the product. Read more

Management

We award Biogen a standard score for stewardship. James C. Mullen, who worked his way up to CEO and chairman of Biogen before the merger, served as Biogen Idec's CEO and president until his retirement in June 2010. George Scangos took over as CEO in Read more

Profile

Biogen Idec discovers, develops, and markets drugs in markets with unmet medical needs. Biogen and Idec merged in 2003, combining forces to market Biogen's MS drug Avonex Read more