as usual, i'd love to hear your comments on this lehman bro's excerpt, harold. i'll think you'll agree that it's a smidge more comprehensive than their previous reports.
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Biogen: Update From Analyst Meeting
Author: CA Butler, PhD / S. Pandya 212-526-4410
Rating: 1
Company: BGEN
Ticker: BGEN
Rank (Old): 1-Buy
Rank (New): 1-Buy
Price : $93 3/8
52wk Range: $121-42
Price Target (Old): $130
Price Target (New): $130
Today's Date: 5/05/99
Price (As of 5/4): $93 3/8
Revenue (1999): $740 Mil.
Proj. 5yr EPS Grth: 20.0 %
Shares Outstanding: 78.7 Mil.
Dividend Yield: N/A
Mkt Capitalization: $7.35 Bil.
P/E 1999; 2000: 35.9X; 30.3X
Current Book Value: $10.77/sh
Convertible: None
Debt-to-Capital: 6.7 %
Disclosure(s): C
Highlights:
* We attended an analyst meeting that Biogen held yesterday. The company reiterated many of the themes outlined during the reporting of 1Q99 earnings last month.
* Highlighted was that, overall, the company's strategy and business outlook remain intact. Management emphasized with an increased comfort level that growth in Avonex sales are likely to continue driven by increased geographic expansion and increased adoption of the "treat-early" approach for MS.
* Clinical programs continue to progress, with increased visibility on the pipeline likely this year. Efficacy results from a Phase IIb trial for AMEVIVE, a treatment for psoriasis is possible by the end of 2Q99.
* We maintain our 1-Buy investment rating with our FY99 EPS estimate of $2.60 unchanged.
Summary:
Yesterday we attended an analyst meeting that Biogen held in Boston. The company reiterated many of the themes that were outlined at the time of the first quarter earnings release. Management emphasized that the company's strategy and business outlook remain intact. We outline some of the major highlights of the meeting below:
1) Management expressed that Avonex sales should continue to grow. Growth will be driven by increased geographic presence, broader indications, earlier and more aggressive treatment and by increased experience on the part of patients and physicians. Recall that Avonex sales growth experienced a re-acceleration with growth in excess of 70% (Y-o-Y) the last three quarters. The multiple sclerosis market continues to be under-penetrated, as the company estimates that over 350,000 patients worldwide are accessible with current interferon therapies. Biogen reiterated its goal of having 100,000 patients on Avonex in a few years time. Maintaining the market leadership position of Avonex remains a critical objective of the company. Avonex continues to have 60% marketshare in the US with Biogen estimating that the drug captures close to 75% of the new scripts written for nave MS patients. In Europe, at the end of 1Q99, Avonex enjoyed 42% marketshare (16,000 patients), with Betaseron and Rebif holding 43% and 15% respectively. Biogen also highlighted data that was released at the recent American Academy of Neurology (AAN) meeting in April which showed that Avonex reduced brain atrophy by 55% in MS patients after two years. More data on the cognitive dysfunction benefit with Avonex is likely in the future.
2) Company indicated that the clinical pipeline continues to progress and is comfortable with the fact that they can likely deliver two or more drugs to the market within the next three years. Within the company's pipeline a number of programs should provide efficacy data this year. The most advanced clinical candidate remains, AMEVIVE (LFA3TIP), a fusion protein, targeted for various T-cell mediated autoimmune disorders. Results from a Phase IIb clinical trial for the treatment of psoriasis are likely to be announced by the end of 2Q99 with a planned launch in the 2H2001. ANTOVA (anti-CD40 ligand), a humanized monoclonal antibody, has completed Phase I studies in ITP, an immune platelet disorder. Both acute and chronic dosing were found to be well tolerated. Based on its mechanism of action, Biogen has indicated it plans to initiate Phase II trials with the product in as many as six indications. In two of these indications (ITP & lupus nephritis) Phase II trials have been initiated. We believe that Phase II trials for the four additional indications, that include Factor VIII resistance and renal transplantation, will most likely we initiated this year. ADENTRI (CVT-124), a potassium-sparing diuretic, is being studied in the CHF setting and is currently in Phase II clinical trials. Data from this trial are also possible late this year or early next year. Product in-licensing deals are also possible to augment the current pipeline. BUSINESS DESCRIPTION: Biogen is a leading biotech company which currently derives revenues from royalties on licensed products as well as on sales of its first proprietary product, AVONEX (for multiple sclerosis).
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Disclosure Legend: A-Lehman Brothers Inc. managed or co-managed within the past three years a public offering of securities for this company. B-An employee of Lehman Brothers Inc. is a director of this company. C-Lehman Brothers Inc. makes a market in the securities of this company. G-The Lehman Brothers analyst who covers this company also has position in its securities. |
