Biogen Idec

Having found a couple of biotech gems recently in Gilead and Genzyme I am currently trawling through the biotechs in the Nasdaq 100 for more beauties.

Amylin Pharmaceuticals was first but as it not currently profitable I ignored it for now as to value it will require an in-depth understanding of its drugs and their markets.

So on to Biogen Idec (BIIB.)

BIIB has a market cap. of $16 Billion, a 2007 PE of 18 and a revenue growth rate of 17%. There is no dividend but BIIB does have a small share repurchase program.

BIIB specialises in Multiple Sclerosis with its main drug Avonex accounting for over 60% of its revenues.

Most of the remaining revenue is made up of its Non-Hodgkin's Lymphoma drug Rituxan which it revenue-shares with Genentech.

BIIB has a new MS drug on the market - Tysabri - which currently accounts for 4% of revenue but is growing fast.

The pipeline is strong with 3 drugs in phase III trials as well as a program to expand the use of Rituxan to MS.

So what do I think of BIIB? I would give it a B grade. The valuation is reasonable and the pipeline looks strong but being so dependant on one drug for revenue is risky as Amgen has recently found out.

The late-stage drugs are not ready to hit the market yet so it may be worth re-visiting BIIB in a year's time.