Biogen Gets FDA Approval For MS Treatment Tecfidera

Mar.28.13 | About: Biogen Inc. (BIIB)

Yesterday, the FDA approved Biogen's (NASDAQ:BIIB) multiple sclerosis treatment Tecfidera. Since the announcement, shares flew up close to 7% to where they currently trade at $190.69. YTD, shares are up 25% and trade at their 52 week high, as shown below.

This announcement is a major win for Biogen as the new drug Tecfidera is expected to generate $3.25 billion in annual revenue by 2017.

Per the above linked Bloomberg article:

The drug follows Novaratis AG's (NYSE:NVS) Gilenya and Sanofi's (NYSE:SAN) Aubagio to the market as oral options for MS, a central nervous system disease otherwise treated by injection or infusion. MS affects 2.1 million worldwide, according to the National Multiple Sclerosis Society.

The FDA stated yesterday that:

"No drug provides a cure for multiple sclerosis so it is important to have a variety of treatment options available for patients," said Russell Katz, M.D., director of the Division of Neurology Products in the FDA's Center for Drug Evaluation and Research. "Multiple sclerosis can impair movement, sensation, and thinking and have a profound impact on a person's quality of life."

Results from two clinical trials showed that those taking Tecfidera had fewer MS relapses compared to people taking an inactive pill (placebo). One of the trials showed that those taking Tecfidera experienced a worsening of disability less often than patients taking a placebo.

Biogen Idec has a market cap of $43.17 billion and revenue of $5.516 billion last year. Analysts currently have a $175.36 mean price target on Biogen shares and a median target price of $179.50.

Positives

  • The company currently trades with a P/E of 31.7, a P/B of 6.2 and D/E of 0.1 which are all below the industry averages 49.0, 6.8, and 0.4 respectfully.
  • Operating margins of 33.6% and net margins of 25% are all above the industry averages 25.9% and 13.7% respectfully.
  • Biogen pays no dividend but has a history of repurchasing its shares. Biogen bought back $918 million (net) shares last year.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.