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Biogen- A Biotech Buyback Bet

We last held shares of Biogen Idec Inc. (BIIB) in 2010; the biotech company is known for selling drugs and therapies to combat many degenerative nerve diseases, blood conditions and autoimmune diseases, notes David Fried, editor of The Buyback Letter.

Biogen was founded by Nobel Prize winners in 1978 as one of the first global biotech companies, and innovated research to try to defeat neurological diseases like multiple sclerosis, Alzheimer’s disease, Parkinson’s disease and amyotrophic lateral sclerosis (ALS, aka Lou Gehrig’s disease).

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The company has also entered the arms race in gene therapy, a promising therapeutic approach that corrects disease-causing genetic errors.

Earlier this year Biogen acquired Nightstar Therapeutics for $800 million. Nightstar is a clinical-stage gene therapy company focused on treatments for inherited retinal disorders. The purchase was part of a gene therapy acquisition trend among the world’s largest pharmaceutical companies.

The companies want not only to sell the corrective gene therapies, but also acquire gene therapy manufacturing expertise. Successful results in clinical trials won’t matter if a company doesn’t have a manufacturing process able to produce usable drug products.

Biogen had a rough start to the year partly due to the failure of the Alzheimer’s project aducanumab. At two late-stage trials it became clear that the monoclonal antibody, which Biogen believed would clear amyloid lesions, could not prevent the disease.

However, Biogen is not giving up on Alzheimer’s. It continues to partner with Japanese pharmaceutical company Eisai on several treatments that are in late-stage trial.

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Biogen still has many ongoing medical trials. It is presently developing its next MS medicine Vumerity, whose approval might happen later this year. And there are in-the-pipeline investigations for inherited disease of the eye, pain management, and cardiovascular disease.

The company is expected to post quarterly earnings of $7.50 per share in its upcoming report later this month, which represents a year-over-year change of +29.1%. Revenues are expected to be $3.47 billion, up 3.3% from the year-ago quarter. In the last 12 months, management has reduced shares outstanding by 8.1%.

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