Biogen Idec (BIIB) reported second-quarter earnings per share of $1.27, well above the year-ago figure of $0.73 and the Zacks Consensus Estimate of $1.08. Revenue increased 11% to $1.2 billion, with Tysabri and Rituxan being the primary growth drivers.
Based on second quarter results and Biogen’s new guidance for 2010, we have raised our earnings estimate for 2010 by 29 cents to $4.73. Key products Avonex and Tysabri continue to contribute significantly to sales and we expect Biogen to maintain its leading position in the multiple sclerosis market. The company is working on building its pipeline through acquisitions and in-licensing deals.
In our opinion, Biogen has the best pipeline in all of biotech, and could be an attractive takeover candidate for pharma companies interested in biologics. Although we remain concerned about an increase in the occurrence of PML in patients using Tysabri, we are upgrading the stock to Outperform based on the second quarter performance and improved outlook for 2010.