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Biogen Inc. Message Board

  • MasterContrarian MasterContrarian Mar 4, 1998 1:50 PM Flag

    Rituxan sales at high end of expectation

    Here is some info I picked up from the SI.

    Hey guys! Forget pure technical analysis when it comes to biotechs-
    Here is the REAL REASON that IDEC is going to go up-
    Lehman Brothers reports that sales of their lead product so far are
    at the high end of expectations and have raised their earnings
    estimate from 26 cents to fifty cents, and target price of the stock to 59 dollars. You
    can take a look for yourself- just find the Lehman
    Brothers biotechnology web site. Lehman reports "significant off
    label use" of Rituxan.

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    • IDEC has been planning a new mfg facility for a couple years now. At one point they were considering 4-5 sites, including
      Texas and North Carolina, as well as San Diego. I think they have strongly preferred SD all along, but the community will have to
      be competitive. The facility will cost on the order of $200,000,000, essentially duplicating the Genentech Vacaville facility.
      I believe it will be used for pipeline products and for contract manufacturing. This will expand their mfg. capacity 10-100x.

    • IDEC most likely will build a manufacturing plant south of San Diego(Chula Vista area?). There are numerous Bio Tech
      companies located in the San Diego region. The city will likely negotiate to keep them. IDEC had been building Rituxan inventory at
      its Torreyanna Rd. facility prior to approval, and must continue to use that facility to meet demand for Rituxan sales. IDEC is
      bound by an agreement with GNE to produce Rituxan for at least 2 years from approval. ( In house production facilities and
      technical knowledge is a big plus for IDEC ) GNE is currently building manufacturing facilities in Vacaville which when approved for
      use will likely supply Rituxan. Probably 12-18 months from being on line. Additional production capacity at an alternate IDEC
      sight will likely supply Y2B8 which the company now has exclusive rights, as well as their pipeline.

    • Does IDEC withdrew follow-on offering affect it's stock price?

      • 1 Reply to sma_1998
      • They announce a 10% dilution, Stock goes up

        They announce, basically, sales are better than expected and they don't need the money from the secondary offering, and the stock gets hammered. Go figure.

        Maybe the street doesn't like a company that doesn't know what to do.

        The good news.

        Net Sales: 29.4 since Dec. 15th
        5 mil from Dec

        ~25 million in 2 months

        $150 million earnings for the year. More if sales increase.

        I think they have about 20 million shares outstanding. Is this right??

        150/20= $7.50 earnings per share

        forward looking P/E= 40/7.50 = 5.3 SEEMS A LITTLE LOW!!!!!!

        If we put them a 25=P/E

        P=E*(P/E) = 25 * 7.50 = 187 !!!!!!

        Where am I wrong! Unless it's in not ordering my Italian Villa




        $0.35/shr 4th qtr
        $15 million in revenue from genentech one time payment
        $5 Million from 15 days of sales in Dec
        total 4th qtr rev = $26 mil
        Sales force in place-up and running

        $5 mil X 6(15 day periods)=30 Million for 1st qtr revenues + interest on $69 mil
        in bank...about 1 million?? at 6% for the qtr??
        1st qtr revenue about 31 million

        Revenues 20% higher in 1st qtr
        EPS = about $0.42 for the 1st quarter-assuming 20% higher from 4th qtr.

        $0.42 X 4 qtrs = $1.68 for the year
        $1.68/42 = 25 = P/E for 98 estimate
        Hopefully sales exceed the last 15 days of Dec pace.

        Anyone know what the float is on IDEC


        Yahoo consensus is $0.23 for the whole year!!!
        Obviously some very rosy assumptions,

        Questions...

        How much of the revenue from direct sales does genentech get?
        Have we seen the worst of costs of putting a sales force intact?
        Where did the extra 6 mil come from in 4th qtr revenues?

 
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