The growth is just getting started at Biogen Idec Inc. (NASDAQ:BIIB). OK, so it’s been ongoing for quite some time, but it certainly isn’t about to end anytime soon. The company recently launched Tecfidera for multiple sclerosis in the United States, completed three regulatory filings, is expecting three market launches in 2014, and has major trials releasing data in 2015 and 2016. Oh, yeah, and it crushed the second quarter. Was there any bad news to be found?
Financially speaking …
There were two major catalysts boosting Biogen Idec Inc. (NASDAQ:BIIB) earnings over the past three months. First, Tysabri sales soared 38% year over year after the company acquired Elan Corporation, plc (ADR) (NYSE:ELN)‘s rights for the drug. Global sales actually decreased by 2% compared with the year-ago period, although the company did submit a Biologics License Application in Japan last month that will create a future growth opportunity. Second, Tecfidera launched with a loud bang after being approved on March 27. Total revenue for the drug registered at an impressive $192 million for the second quarter.
Biogen Idec Inc. (NASDAQ:BIIB)’s quarter even beat out that of its oft-compared peer Celgene Corporation (NASDAQ:CELG), which grew at least 17% in revenue, EPS, and income. I think the argument could be made that Biogen had better quarter.
| Metric | Biogen | Celgene |
|---|---|---|
| Second0quarter revenue | $1.7 billion | $1.56 billion |
| Net income | $490.7 million | $478.1 million |
| Shareholders’ equity growth in 2013 | 13.5% | (5%) |
Sources: Biogen and Celgene press releases.
I still think it’s difficult to look past Celgene’s impressive pipeline potential, which is probably the reason the company took the lead in the race for the largest market cap against Biogen Idec Inc. (NASDAQ:BIIB). Nonetheless, both remain incredible growth stories for biotech investors. Just be careful about paying lofty premiums for that growth in the coming quarters.
Reasons for pessimism?
I may be digging a little bit here — I admit it’s tough to come up with negatives — but Friday’s announcement invalidating several Teva Pharmaceutical Industries Ltd (ADR) (NYSE:TEVA) patents for multiple sclerosis drug Copaxone could shake up the market quite a bit. Could the emergence of two cheap generics from Momenta Pharmaceuticals, Inc. (NASDAQ:MNTA) and Mylan Inc. (NASDAQ:MYL) in the first half of next year take some steam out of Tecfidera’s rise? I can’t see it being good news for either Teva Pharmaceutical Industries Ltd (ADR) (NYSE:TEVA) or Biogen, but I’m not sure it’s a death sentence, either.
Foolish bottom line
Biogen remains one of the most promising names in biotech — and growth stocks, for that matter. A solid second quarter and rising full-year guidance for 2013 only support that thesis further. Tecfidera will continue to lift revenue for the next several quarters — or longer — but investors shouldn’t underestimate the risk that generic multiple sclerosis drugs pose. All in all, the enthusiasm for growth remains intact until larger risks reveal themselves.
The article Maturing Pipeline Boosts Biogen Earnings originally appeared on Fool.com and is written by Maxx Chatsko.
Fool contributor Maxx Chatsko has no position in any stocks mentioned. Check out his personal portfolio or his CAPS page, or follow him on Twitter, @BlacknGoldFool, to keep up with his writing on energy, bioprocessing, and biotechnology.The Motley Fool recommends Celgene.
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