The Fly Staff
NEW YORK (TheStreet) -- Shares of drug maker Biogen Idec (BIIB ) are falling after the company reported sales of its flagship MS treatment that came in below expectations. Additionally, Biogen reported that one of the patients taking the drug had died and had a disease previously linked to MS treatments.
WHAT'S NEW: Biogen reported Q3 sales of its main product, MS treatment Tecfidera, amounted to $787M, consisting of $638M in U.S. sales and $149M in sales outside the U.S. The U.S. sales of $638M in Q3 missed analysts' consensus outlook of $643M. Biogen's Q3 adjusted EPS of $3.80 beat the consensus forecast of $3.46, while its overall revenue of $2.51B was also ahead of expectations. The company disclosed on its earnings conference call that a patient who was taking Tecfidera had contracted a brain infection known as progressive multifocal leukoencephalopathy, or PML. The patient subsequently died of complications from pneumonia. The patient had experienced severe lymphopenia, a shortage of a type of white blood cell, for three and a half years, Biogen stated. Lymphopenia is a risk factor for PML. Biogen said it would work with regulatory authorities to ensure that Tecfidera's label has appropriate warnings for patients with lymphopenia. The company said it did not believe that the risk profile of the drug had changed.
ANALYST REACTION: In a note to investors, Morgan Stanley analyst Matthew Harrison recommended that investors buy Biogen's stock today. Tecfidera sales actually beat Harrison's forecast, the analyst stated. Although the news that a patient had died with PML while taking Tecfidera is "concerning," the information is not significant since the patient had lymphopenia, Harrison wrote. He kept a $395 price target on the shares. Meanwhile, Deutsche Bank analyst Robyn Karnauskas said investors have several concerns about Biogen, including lack of catalysts for the stock through the end of the year and concerns about Tecfidera's intellectual property. Additionally, Biogen and Celgene (CELG ) have similar growth rates and are comparable in terms of size, but investors appear to prefer Celgene due to the near-term risks that Biogen is facing, she explained. The analyst thinks that Biogen's pipeline could surpass expectations and she is not concerned about PML's impact on the company. Karnauskas kept a Buy rating on the shares, but prefers Celgene, as she believes that the latter company has a "transformational" pipeline.
PRICE ACTION: In late morning trading, Biogen fell over 8% to $300 per share, while Celgene rose 0.2% to $95.20.
Reporting by Larry Ramer.
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