|From: mopgcw||2/6/2009 5:47:07 PM|
|more fun'n'games: Icahn Proposes Four Biogen Directors and Move to North Dakota |
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By Elizabeth Lopatto
Feb. 6 (Bloomberg) -- Investor Carl Icahn nominated four Biogen Idec Inc. directors and proposed moving the corporate headquarters to North Dakota, signaling the billionaire’s second run for control of the biotechnology company.
Icahn, 72, nominated four people to Biogen’s 13-member board, according to a regulatory filing today. Icahn and his companies owned 6 percent of Biogen as of Sept. 30, making him the fourth-largest shareholder of the Cambridge, Massachusetts- based company.
Biogen, the world’s biggest maker of multiple sclerosis drugs, first became embroiled in a battle for control with Icahn in December 2007, when it ditched a plan to sell itself. Icahn, known for investing in companies he deems undervalued and pushing for change or a sale, lost an ensuing proxy fight with Biogen in June. Biogen shares have declined 30 percent since the company abandoned sale efforts.
To contact the reporter on this story: Elizabeth Lopatto in New York at
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|From: mopgcw||2/6/2009 7:24:40 PM|
|Biogen Faces Heavier Tysabri Pressure |
R.W. Baird downgraded the biotech and lowered the target price.
Biogen Idec (BIIB: Nasdaq)
By R.W. Baird ($53.28, Feb. 6, 2009)
WE ARE DOWNGRADING TO NEUTRAL [from Outperform], new $50 price target [down from $55].
We are reducing our rating on Biogen Idec (ticker: BIIB) shares to Neutral [from Outperform] with a new $50 price target [down from $55]. Our new $50 price target is derived by applying a multiple of 12.5 times our 2009 earnings-per-share estimate of $4.04. We base this new opinion primarily on the concern that Tysabri pressure from new progressive multifocal leukoencephalopathy [a brain infection] cases may be more acute than we had feared.
Recall that investors were comforted by stronger-than-expected patient numbers reported in early January. Recall also that we recently lowered our Tysabri estimates based on fear that foreign-exchange headwinds could shave as much as $10 million from our prior expectations. As it turns out, Tysabri revenue of $218 million was impacted by shortfalls both in the U.S. and outside the U.S.
In addition, while Avonex revenue reflected an impressive beat, we worry that competitive concerns downstream in 2009 (from Novartis' (NVS) FTY-720 and other competitors' pipeline multiple-sclerosis agents) may reduce sentiment on this agent.
In addition, we wonder how much more pricing flexibility Biogen has with Avonex, having grown the drug primarily on substantial price increases in recent quarters. As such, we are retreating to the sidelines here.
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|From: mopgcw||4/17/2009 11:19:29 AM|
|CS: Biogen Idec. Inc. (BIIB) NEUTRAL [V] M. Aberman|
CP: US$ 51.49 TP: US$ 54 CAP: US$ 15.3b
Remain Cautious with Tysabri Still Weak, Revising Estimates
• Conclusion: On the positive side, while the top-line disappointed Biogen was able to beat through better expenses and a one
time tax gain. The company did not see a major impact from inventory or economy related issues that have plagued some of
its peers. That said, Avonex saw minimal sequential growth despite ~10% price increases two quarters in a row and Rituxan
sales came in light. More important, Tysabri net patients adds did not rebound this quarter and the per patient revenue
continued to decline. Causes of the decline could include the economy with more patients receiving free drug; but, we believe
it is more likely due to fewer doses per patient per month as patients delay doses and take drug holidays. The decline in
revenue/patient adds another headwind to Tysabri that may offset a potential rebound in net patient additions. We look
forward to the upcoming AAN meeting to get feedback on Tysabri as well as PIII data from potential competitive MS agents.
• What's New? Biogen Idec reported non-GAAP EPS of $1.05 (excl. options) vs. our estimate of $1.02 and consensus of $0.91.
Revenues of $1,036 M were lighter than our and consensus estimates of $1,095 M and $1,077 M respectively. The better
than expected EPS was primarily driven by lowering operating expenses and a one-time tax benefit. Guidance was reiterated
for 2009 including high single digit revenue growth and non-GAAP EPS above $4.00.
• Implication: Remain Neutral with a $54 Price Target. We have adjusted our model and now value Biogen using a DCF model
given its low long-term growth rate but strong cash flow. While we prefer to sit on the sidelines to see what happens with
Tysabri, we think the upcoming proxy battle and a strong balance sheet could lead to a more aggressive share buyback and
boost Biogen's share price. Absent that move, however, we think the stock will remain range bound until Tysabri
reaccelerates or something positive emerges from the late stage pipeline.
• Valuation based on DCF, P/E no longer applicable. We are moving our valuation basis to a DCF analysis as the P/E
valuation is no longer applicable for Biogen. We believe that Biogen will only achieve a modest 6% annual growth rate in
earnings over 2009E-2012E, no longer allowing it to be viewed as a growth company that can be valued on the basis of a
multiple to earnings. Our DCF analysis supports a $54 price target assuming a 10.2% cost of capital, a 6% annual cash flow
growth rate from 2013-2016, and a terminal growth rate of 2% in 2016.
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