This Day On The Street
Continue to site right-arrow
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
TheStreet Open House

Millennium's Future Remains Cloudy

It's been a lousy year for holders of Millennium Pharmaceuticals (MLNM).

To turn things around, Cambridge, Mass.-based Millennium must convince a skeptical Wall Street that it can become a growth story again. Millennium's multiple myeloma drug Velcade continues to post year-over-year sales growth, but the rate of that growth has slowed as the drug's penetration into the advanced multiple myeloma market matures.

And while Millennium still appears to be on track to reach profitability in 2006, confidence in this goal has waned over the past 12 months because sales of Velcade have managed to hit only the low end of the company's guidance. Because of intense competition, there's been no real help either from Integrilin, the company's blood-thinning drug used during certain heart surgeries.

"Millennium has guided to profits in 2006, but right now, this goal appears to be reachable more on expense cuts than on sales growth," says SG Cowen analyst Phil Nadeau, whose own model for the company has it reaching only break-even in 2006. SG Cowen doesn't rate stocks but Nadeau believes Millennium is fairly valued at these levels; his firm doesn't have a banking relationship with the company.

For growth-hungry biotech investors, backing into profitability by cutting costs is considered almost cheating, which helps explain Millennium's current woes. After slipping 2.3% to $12.09 on Thursday, the biopharmaceutical firm is down 34% this year, seriously underperforming the 1% gain in the Nasdaq Biotechnology Index and 7.5% gain in the Amex Biotechnology Index.

Adding insult to shareholders' injury, analysts' net-loss estimates for Millennium in 2004 and 2005 have grown (and top-line estimates have dropped) over the past 12 months as Velcade sales have not lived up to the more bullish expectations.

1 of 3

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Try it NOW
Only $9.95
Try it NOW
14-Days Free
Try it NOW

Check Out Our Best Services for Investors

Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
Try it NOW
Try it NOW
Try it NOW
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
SYM TRADE IT LAST %CHG
BIIB $429.87 0.00%
AAPL $123.25 0.00%
FB $83.30 0.00%
GOOG $548.34 0.00%
TSLA $185.00 0.00%

Markets

DOW 17,712.66 +34.43 0.19%
S&P 500 2,061.02 +4.87 0.24%
NASDAQ 4,891.2190 +27.8570 0.57%

Partners Compare Online Brokers

Free Reports

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs