Biogen Idec (BIIB) reported third-quarter earnings of $1.33 per share, well above the year-ago figure of $1.20 and the Zacks Consensus Estimate of $1.09. Revenue increased 5% to $1.2 billion, with MS treatments Tysabri and Avonex being the primary growth drivers.
Based on third quarter results, Biogen’s new guidance for 2010 and the impact of the company’s recently announced restructuring plan, we are raising our earnings estimates for 2010 and 2011 by 16 and 65 cents, respectively. Key products Avonex and Tysabri should continue contributing significantly to sales.
Meanwhile, the company’s restructuring initiative should help drive the bottom line. We are also pleased with the company’s intention to streamline its pipeline development and focus on candidates that represent higher potential. Based on these positive factors, we are upgrading Biogen to Outperform with a target price of $76.