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U.S. Equity Research News
Zhang Downgrades Biogen (BIIB) to MARKET PERFORM from OUTPERFORM
July 17, 2009
Jason Zhang, senior research analyst covering the Biotechnology industry, has today downgraded Biogen Idec (BIIB) to a MARKET PERFORM rating from OUTPERFORM.
From Zhang’s note: “Biogen reported 2Q09 revenues of $1,094M exceeding the consensus estimate by $20M, but matching our forecast. In-line OPEX allowed Biogen’s non-GAAP EPS of $0.75 to beat consensus of $0.68. Excluding the $110M Acorda deal, non-GAAP EPS of $1.07 exceeded our $1.05 EPS forecast. The primary reasons for the beat vs. the Street were higher US sales of Avonex, driven mostly by the 9.5% price increase in March, as well as better-than-expected Tysabri sales. The company’s Tysabri re-acceleration initiatives as well as a strong showing at the AAN meeting helped boost Tysabri as the recent cases of PML reported in June did not appear to significantly impact sales. Although it is not statistically proven, it appears that Tysabri’s PML risk is related to treatment duration. Therefore, based on previous trends, we believe that we will see the negative impact of these recent PML cases, not only in new patients, but also in patients that have been on treatment for longer periods of time. The increased risk of PML and the likely slowdown of Tysabri’s growth prospects eliminate a major reason for our OUTPERFORM rating. As such we are lowering our rating to MARKET PERFORM. Finally, we expect BIIB shares to face additional pressure in 2H09 as we get updates on competitive oral MS drugs in development.”
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