Biogen (BIIB) Board Okays Hemophilia Business Spin-off
Biogen Inc. BIIB announced that its board of directors has approved the spin-off of its hemophilia business into a new company Bioverativ Inc.
A look at Biogen’ year-to-date share price movement shows that the company has underperformed the Zacks classified Large Cap Pharmaceutical industry. Specifically, the stock lost 6.8% during this period, compared with the 5.5% drop for the industry.
Note that Biogen has declared a special dividend distribution of all of the outstanding shares of Bioverativ common stock. Biogen’s stockholders of record as of Jan 17 will receive one share of Bioverativ for every two shares of Biogen. The dividend will be paid on Feb 1.
Following the spin-off, Bioverativ will become an independent, publicly-traded company, trading under the ticker symbol “BIVV” on the NASDAQ stock market. Biogen will have no ownership interest in the new company.
Bioverativ will focus on research, development and commercialization of innovative therapies to address areas of serious unmet need for people with hemophilia and other rare blood disorders, including two of Biogen’s marketed products – Eloctate and Alprolix. While Eloctate is indicated for hemophilia A, Alprolix is approved for the treatment of hemophilia B.
In the first nine months of 2016, Eloctate and Alprolix generated revenues of $364.2 million and $240.5 million, respectively.
Spinning off the hemophilia business will allow Biogen to focus on developing and bringing neurology products to market. The company plans to expedite its efforts to bring new treatments for multiple sclerosis, spinal muscular atrophy (SMA), Alzheimer’s disease, Parkinson’s disease, amyotrophic lateral sclerosis (ALS) and neuropathic pain to market.
BIOGEN INC Price and Consensus
BIOGEN INC Price and Consensus | BIOGEN INC Quote
Biogen carries a Zacks Rank #3 (Hold).
Key Picks in the Sector
Some better-ranked stocks in the health care sector include Vanda Pharmaceuticals Inc. VNDA Heska Corp. HSKA and Cambrex Corp. CBM. Each of them sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Vanda’s loss estimates for 2016 narrowed from 62 cents to 52 cents, while its earnings estimates for 2017 increased from 13 cents to 22 cents over the last 60 days. The company posted a positive earnings surprise in three of the four trailing quarters with an average beat of 56.65%.
Heska’s earnings estimates increased from $1.13 to $1.35 for 2016 and from $1.38 to $1.53 for 2017 over the last 60 days. The company posted a positive earnings surprise in all of the four trailing quarters with an average beat of 301.64%.
Cambrex’s earnings estimates increased from $2.46 to $2.55 for 2016 and from $2.91 to $3.06 for 2017 over the last 60 days. The company posted a positive earnings surprise in three of the four trailing quarters with an average beat of 19.78%.
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