Biogen Idec ( BIIB) shares fell 1.7% after W.R. Hambrecht downgraded the company to hold from buy, telling investors shares were overvalued and that the company could miss estimates when it reports earnings later this month. W.R. Hambrecht analyst Jason Kantor warned investors that Biogen's stock appears pricey heading into the release of the company's second-quarter earnings on July 29. The analyst cited weakness in Avonex, Biogen's multiple sclerosis treatment, as a reason for the rating change. "The Avonex franchise looks particularly weak heading into the second quarter," said Kantor. "Avonex had a sequential decrease in prescriptions in the U.S., there was a large amount of stocking next quarter, currency is now working against Biogen and manufacturing issues may not be fully resolved." With Avonex set to dip and manufacturing issues possibly lowering operating margins, Kantor said Biogen may not be able to top its second-quarter earnings estimate of 32 cents a share. That said, the analyst noted that sales of Rituxan, its rheumatoid arthritis drug, could be stronger than expected and raised his second-quarter earnings estimate to 30 cents from 29 cents. In reaction, Biogen shares dipped $1.06 to $60.13. Over the long-term, Kantor said Biogen's prospects were much brighter, calling the company "one of the superior large-cap biotech companies" because of Antgren, the MS treatment it's splitting 50-50 with Elan ( ELN). But with Biogen trading at nearly 45 times 2004 earnings, the analyst recommended that investors either buy when shares are cheaper or consider looking at ImClone ( IMCL) or The Medicines Company ( MDCO). (W.R. Hambrecht, does and seeks to do, business with the companies covered in its research reports. Also, Kantor owns shares of The Medicines Company.