Biogen Idec Inc. (BIIB): This Biotechnology Stock Is On The Roll

Baxter International Inc. (NYSE:BAX) also has a prophylactic drug for Hemophilia A – ADVATE (Antihemophilic Factor (Recombinant factor VII). Baxter is a $37.61 billion (market cap) company and a competitor of Biogen Idec as it also focuses on hemophilia and immune disorders apart from other chronic and acute conditions including infectious diseases and kidney disorders. Baxter’s range of products generated revenues to the tune $14.19 billion in FY 2012 and earnings of $4.14 per share. Baxter is a dividend paying company with a dividend yield of 2.82%. The street expects a small increase in full year 2013 EPS at $4.66.

Investor’s viewpoint

The market expects ELOCTATE and ALPROLIX to be approved by the FDA in early 2014. According to the collaboration agreement with its partner, Biogen leads the development and manufacturing and commercialization rights of both drugs in North America and all other regions not covered by the Swedish company. Swedish Orphan Biovitrum, however, has the option of assuming the final development and commercialization in Europe, Middle East and Northern Africa.

Hemophilia A occurs in roughly 5,000 male babies born every year and hemophilia B occurs in one out of every 25,000. Both the drugs open a new avenue of revenue for Biogen Idec Inc. (NASDAQ:BIIB) and are expected to generate revenues of around $200 million in 2014 and $375 million in 2015.

On the negative side is the uncertainty regarding TECFIDERA – it is not certain that the European regulator, European Medicines Agency (EMA) will grant it regulatory data protection in Europe. This could open the way for generic manufacturers to launch cheaper versions in the market and affect long term profitability of Biogen.

Biogen Idec Inc. (NASDAQ:BIIB) stock has appreciated almost 50% since January 2013, which is nothing new for it as it has returned 274% in the last five years. Considering everything, I would suggest investors to hold the stock and those wanting to buy, to exercise caution and buy only at dips.

The article This Biotechnology Stock Is On The Roll originally appeared on Fool.com and is written by Kanak Kanti.

Copyright © 1995 – 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.