Biogen’s growing portfolio
Celgene has its perks, but Biogen has plenty to keep investors happy as well.
Biogen Idec Inc. (NASDAQ:BIIB)’s success begins and ends with the multiple scleroris market, and its tried-and-true drug Avonex leads the way. Avonex pulled in more than $2.9 billion in 2012, posting year-over-year growth of 8.4%. Fellow MS drug Tysabri also pulls its weight at Biogen, racking up more than $1.1 billion in revenue last year with smaller growth. Both drugs remain key players in an MS market that’s expected to grow by more than $4 billion between 2011 and 2016.
To keep up with that trend, Biogen bought out Tysabri co-marketer Elan Corporation, plc (ADR) (NYSE:ELN)‘s stake in the drug to capitalize fully on its growth. Biogen paid Elan a hefty $3.2 billion for the stake, but Tysabri’s expected to remain a critical cog in MS treatment that analysts expect could hit sales of $1.9 billion by 2018. Elan will still receive a percentage of global sales of Tysabri in the future, but the move gives Biogen full control over its blockbuster drug. Combined with the company’s victory in gaining extended patent protection for Avonex until 2026, Biogen’s looking good in this growing market for the future.
But is the company too focused on multiple sclerosis? Rituxan — which Biogen co-markets with Roche and is cleared to treat non-Hodgkin’s lymphoma, rheumatoid arthritis, and more — also brought in more than $1 billion in 2012, providing necessary diversity.
However, it’s Biogen’s future that truly looks promising. Oral MS drug BG-12 still is waiting for an FDA approval, but expectations are through the roof. Peak sales estimates average around $3 billion, a mark that would eclipse any of Biogen’s current drugs. With late-stage drugs in the pipeline for lymphomas, hemophilia, and more, Biogen’s future looks safe — especially with BG-12 in hand.
Which stock has the edge?
So, which one of these top biotech stars should you pick?
Celgene Corporation (NASDAQ:CELG) has plenty going for investors: With Revlimid’s dominant position in the growing multiple myeloma market and years of patent protection ahead, shareholders don’t have to worry about sales dropping off any time soon. The company should continue to see strong growth from Revlimid, even as Vidaza continues with the shadow of potential generic competition looming over it and Abraxane continues to chug along underwhelmingly. However, with Apremalist’s disappointing recent results, only Pomalyst looks to provide serious growth after Revlimid.
Biogen Idec Inc. (NASDAQ:BIIB), on the other hand, offers diversity and growth above and beyond what Celgene does. Its MS-centric portfolio is worrying, but continued revenue from Rituxan and its diverse pipeline — particularly with the sky-high expectations for BG-12 — paint a picture of growing sales ahead. BG-12 could strip some of Avonex and Tysabri’s sales, and the MS market is a competitive one, but Biogen’s positioning itself well for a bright future.
In this battle between two big biotech stars, the edge just goes to Biogen. It’s hard to criticize any investor for picking up either of these stocks, however: Celgene and Biogen are positioned well in growing, lucrative markets, and their recent gains look to be the start of something special going forward.
The article Better Biotech Buy: Biogen vs. Celgene originally appeared on Fool.com.
Fool contributor Dan Carroll has no position in any stocks mentioned. The Motley Fool recommends Johnson & Johnson. The Motley Fool owns shares of Johnson & Johnson.
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