Spotlight on Biogen

Chris is a member of The Motley Fool Blog Network -- entries represent the personal opinion of the blogger and are not formally edited.

Scanning through my routine news outlets and stock screeners I came across Biogen (NASDAQ: BIIB).  This is a name I had heard before a few years back and looking at it's recent performance I decided to dive a bit deeper. 

The company, which is up about 75% this year, focuses its efforts on treating neurodegenerative diseases, hemophilia and autoimmune disorders.  When looking at the numbers the stock is definitely in a strong and healthy financial position.  It's P/E is well below it's peers despite the recent rise in price.  Margins and Sales are both growing (which is a double positive) and even at it's new highs, it is gaining more coverage by wall street firms with Buy ratings.  Moody's even upgrade it's credit rating last month!

With those credentials, I would say BIIB has a worthy spot in a well diversified portfolio as your pick for biotechnology (or health care).  It's a strong growing company that's not tied to any one product and should weather a market storm should the recent bout of optimism begin to wane. 

That's not the whole story though.  I believe BIIB has some opportunities this month to push higher.  First of all it has it's earnings release a little later this month.  It has yet to produce a negative earnings surprise and has beat expectations 4 of the last 8 quarters.  These positive surprises have been a strong catalyst for BIIB's long upward trend, one I fully expect to continue. 

Novartis (NYSE: NVS) one of BIIB's competitors has had some negative news for its MS drug Gilenya.  The Committee for Medicinal Products for Human Use (CHMP) in Europe is set to release information regarding Gilenya on April 20th.  Recent studies among US neurologist show an increasing level of discomfort with the drug and that sentiment should carry though to the hearing which, should it be negative on Gilenya, would be positive for BIIB. 

Lastly, BIIB own MS drug, lablled BG-12 is set to release Phase 3 data on the drug.  Unlike the negative press and results surrounding Gilenya, BG-12 has shown to be effective without the worrisome side affects such as death as is the case with other drugs. 

I strongly expect BIIB to outperform the market over the next few months.?


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