Amgen, Inc. (AMGN), Celgene Corporation (CELG), Biogen Idec Inc. (BIIB): Watch Out for These 3 Biotech Companies

A company launching different drugs

Biogen Idec Inc. (NASDAQ:BIIB)’s oral multiple sclerosis drug, Tecfidera, witnessed a strong launch in the U.S. market. Analysts expect Tecfidera to generate $422 million in fiscal 2013 for Biogen. However, there remains a concern regarding its regulatory data protection (RDP) in Europe. It is highly probable that the European Medicines Agency (EMA) will not provide a RDP designation to this drug once it is approved in Europe. This means Tecfidera will face generic challenges, which can jeopardize its long-term profitability. Currently, it is estimated that the European market will contribute approximately 36% of the total estimated sale of Tecfidera. Therefore, investors should remain cautious as to how the EMA will react to Tecfidera.

Additionally, analysts believe Biogen Idec Inc. (NASDAQ:BIIB)’s Eloctate and Alprolix drugs will receive FDA approval by first half of 2014. These drugs will be used in the treatment of Hemophilia A and Hemophilia B respectively. Hemophilia is an inherited disease that affects blood clotting. In the U.S., it is estimated that one out of every 5000 new born babies are affected by Hemophilia A and Hemophilia B is one out of every 25,000. These drugs will open up a new revenue generating opportunity for Biogen. As such, Biogen is expected to generate combined revenue of $199 million in 2014 and $375 million in 2015 from both these drugs.

Conclusion

The new licensing agreement with MorphoSys, and the positive outcome results of Apremalist, will certainly strengthen Celgene Corporation (NASDAQ:CELG)’s product portfolio. This will drive its future revenue upwards. Also, Amgen, Inc. (NASDAQ:AMGN)’s possible acquisition of Biocad and the launch of t-vec will help it to increase its top line. Therefore, both these stocks are recommended as a buy.

The launch of Eloctate and Alprolix will create a new revenue generating opportunity for Biogen Idec Inc. (NASDAQ:BIIB), but the uncertain stance of EMA on Tecfidera requires a recommendation for a hold on this stock.

The article Watch Out for These 3 Biotech Companies originally appeared on Fool.com and is written by Madhu Dube.

Madhu Dube has no position in any stocks mentioned. The Motley Fool recommends Celgene. Madhu is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited.

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