Brokerage houses have upgraded and downgraded Biogen regularly. There were several that upgraded Biogen recently, the most recent being H&Q two weeks ago.
Maybe Biogen at $46 per share is a bit high based on $1.17 earned per share over the past year. I think I might think the same thing. But, I think the company will earn $2 per share this year and will slowly grow earnings until LFA3TIP, VLA4, OP1, CVT124 and especially anti-CD40L hit the market beginning in 2000-2001.
It is nearly impossible to judge when the market will begin to consider the potential value of a company. Look at IDEC, Isis or Ligand or a host of other biotechs: none are showing a profit, but they have pretty large market caps. What value should a company have that earns good profits, does what they say they are going to do, and still has a pipeline that rivals any in the world? Will the market build in a premium this winter, this year, next year, after the FDA begins approving more drugs?
I think 65 is too high a price for now and 40 is too low a price. I think low 50s is pretty reasonable based on the current market environment of low interest rates and few high tech gimmes. After positive CD40L and LFA and OP1 and CVT data this year I think that low 70s could be justified. |
