Biogen to be added to S&P100 - Analyst Blog

Biotech company, Biogen Idec BIIB, will be added to the S&P100 index after market close on Friday, Mar 21. With a market cap of more than $80 billion, Biogen is considered to be more representative of the mega-cap market space. Shares were up 3.9% on the news. Biogen, which exited 2013 on a strong note, should continue performing well this year.

The company is well known for its strong presence in the multiple sclerosis MS market. Biogen's MS portfolio consists of drugs like Avonex, Tysabri and recent entrant Tecfidera. Tecfidera, an oral MS treatment, is off to a strong start in the U.S. and already holds a leading position in the oral MS market. We expect the drug to do well in the EU too where it was launched recently.

Apart from MS, Biogen is focusing on autoimmune disorders, neurodegenerative diseases and hemophilia. The company has a couple of hemophilia candidates currently under FDA review - Eloctate (long-acting factor VIII) and Alprolix (long-acting factor IX). Both could gain approval this year. Alprolix enjoys orphan drug designation in both the U.S. and the EU. A convenient dosing schedule (supported by a longer duration of action and a suitable safety profile) could help these candidates capture share from existing products in the hemophilia market.

We expect 2014 to be a catalyst rich year for Biogen with several data readouts expected on the company's mid-stage pipeline. Much-awaited data include proof-of-concept or proof of biology read-outs on candidates like anti-CD40 ligand (lupus – phase II); anti-LINGO (MS/ acute optic neuritis), BIIB037 (Alzheimer's disease), neublastin (neuropathic pain) and STX-100 (idiopathic pulmonary fibrosis).

Biogen is a Zacks Rank #3 (Hold) stock. Some better-ranked stocks in the biotech sector include companies like Gilead Sciences Inc. GILD, Alexion Pharmaceuticals, Inc. ALXN and Alkermes plc ALKS. All three carry a Zacks Rank #1 (Strong Buy).