Biogen Message Board - Msg: 5013301

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Biotech / Medical : Biogen

BIIB 183.27

+0.7%

11:54 AM EST

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To: Hong-Lee Yu who wrote (681)	6/25/1998 12:14:00 PM
From: Harold Engstrom	Read Replies (1) of 1686

"Biogen's royalty will move from $167 million ('99) to a new estimate of $179 million ('99) and from $175 million in 2000 to $200 million in 2000." A bit strange that they are projecting these increases in royalty income as the reason for an upgrade, given the positive report given to shareholder regarding Avonex sales and progress on the pipeline. An additional $12MM ('99) and $25MM ('00) means lower percentages for SG&A and COG and more money to pre-tax bottom line, on the order of about 6C and 11C per share. But, Avonex sales look far stronger than analysts had predicted (some analysts had thought sales would plateau long ago and some thought $400MM annual sales was the limit). If I were the Lehman analyst I would be a little embarrassed to be so far behind the curve here. I mean, here we are doing analysis for free on the web that is better that that of a highly paid analyst. He sure outlines the Intron A market forces well, but those forces are relatively well-known. And a target price of $60? I won't complain when we pass $60, but talk about keeping the bar low! I wonder what these analysts think about Merck licensing VLA-4 and having it in asthma patients less than 200 days later (Phase II). I do think it would be unhealthy for the stock price to get too far ahead of actual progress, but it shocks me that analysis is so incomplete and poorly weighted. Of course, this was publicly available, so maybe their internal reports are far better. I hope so.

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