Despite this stock having been much higher, analysts have an average price target north of $61.00.  Its hard to blame the analysts for not being more bullish since Biogen failed to attract any serious bidder.  Because of that failed bidding process, we’d throw the chart out the window for any long-term patterns and even for longer-term moving averages.  But on a short-term basis it looks like $55.00 held just about the entire time as support and shares are only about 5% under where they were before the company announced it was under strategic review.  If today’s stock price and options were to remain static, we’d say options traders were braced for a move of up to $1.80 to $2.25 in either direction.  We’ll also get to see if Carl Icahn is having any "company acknowledgment or capitulation" in his quest to add three board members.

Since we saw the numbers out of Genentech (NYSE: DNA) for Rituxan, we already have much of the key data for Biogen-Idec revenues.  The rest will boil down to earnings and expense management, along with any new drug data and guidance.

• Genentech earnings won, drug sales didn’t.

Biogen Idec Inc.’s 52-week trading range is $42.86 to $84.75.

Jon C. Ogg
February 4, 2008

U.S. product sales were $2.155 Billion, an 18% increase year over year.  As far as guidance, Genentech continues to expect 28% to 32% growth in non-GAAP earnings per share for the full year 2007, relative to 2006, for a range of $2.85 to $2.95.  unfortunately, and at least for the time being, the street has paid much closer attention to those revenue figures.

Shares closed up 0.3% in normal trading, but shares traded down about 2% at $76.00 in the initial after-hours trading reaction before recovering a bit of the losses.  Until the company clarifies its sales and expectations and until it gives more formal guidance in the conference call, this one should only be considered a partially-known earnings report.

OTHER ISSUES:

• Genentech announced that in the third quarter of 2007 it resubmittedthe supplemental Biologic License Application for Avastin®(bevacizumab) with chemotherapy in first-line metastatic breast cancerbased on data from the E2100 trial. The U.S. Food and DrugAdministration (FDA) notified the company that the Oncologic DrugsAdvisory Committee (ODAC) meeting would occur in December 2007 and theFDA action date is February 23, 2008.
• Genentech also announced that enrollment was completed in the Phase IIIfirst-line HER2-negative metastatic breast cancer study RIBBON-1evaluating physicians’ choice of chemotherapy with Avastin, the PhaseIII study of Rituxan® (rituximab) in second-line relapsed chroniclymphocytic leukemia, and the Phase II study of topical VEGF(telbermin) as a treatment for diabetic foot ulcers. Additionally,Genentech initiated enrollment in a Phase III combination study ofRituxan and Avastin in first-line diffuse large B-cell lymphoma, aPhase II combination study of Avastin and sunitinib malate in renalcell carcinoma, and a Phase I study of the anti-cMET molecule MetMab inpatients with solid tumor malignancies.

Jon C. Ogg
October 15, 2007

We used to do a breakdown on by-drug sales, but it seems that as the coverage has become more and more focused that there is just about always an equal number of analysts saying how pleased they were in one drug and disappointed with another.  The company breaks out its individual sales in Rituxan, Avastin, Herceptin, Lucentis and more.

Analysts still have a positive bias despite a dead-money stock performance and the average price target remains above $90.00.  If you trust the current options pricing as an indicator, it looks like options prices are not expecting a price change of more than $1.00 to $1.15 in either direction.

As far as the chart is concerned, this one has been dead money for two-years despite its stellar growth.  The good news of late is that the long-term downtrend chart pattern that was in place all year was broken in September.  That isn’t yet indicative of any sharp reversal, but at least it is out of that range that took it to two-year lows this summer.

With a $77.00 price it has roughly an $81 Billion market cap.  Shares have traded in 12-month range of $71.43 to $89.73 and shares briefly flirted with the $100 share price handle in late 2005.  As far as forward 2008 estimates, at $3.50 EPS and $13.5 Billion consensus, Genentech trades with a forward 2008 P/E ratio of 22 and a multiple of 6-times revenues.  Here is a link to the company’s pipeline as well.

In 2006 the company offered an update to a much longer-term plan to 2010:
20 new molecules into clinical development;
15 major new products or indications onto the market;
#1 in US Oncology sales;
average annual compounded annual non-GAAP EPS growth rates of 25%;
cumulative cash flow of $12 Billion.
We noted the huge options open interest in a competitor on Friday;
And by now it is well known that Biogen-Idec is up for sale; this could impact the Genentech-Biogen relationship over Rituxan sales;
Telik is way up after a clinical hold was released.

Jon C. Ogg
October 15, 2007