NEW YORK (TheStreet) -- Biogen Idec (BIIB) shares are up 0.6% to $344.44 on Monday after the FDA approved the company's new treatment for patients with relapsing forms of multiple sclerosis.
The treatment, Plegridy, was approved following a two year Phase 3 placebo controlled study involving 1,500 MS patients, some of whom were given the drug during the second year of the study after receiving the placebo during the first year.
The new treatment is the long-acting version of Biogen's older drug, Avonex, and can be injected once every two weeks instead of weekly.
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TheStreet Ratings team rates BIOGEN IDEC INC as a Buy with a ratings score of A. TheStreet Ratings Team has this to say about their recommendation:
"We rate BIOGEN IDEC INC (BIIB) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its robust revenue growth, largely solid financial position with reasonable debt levels by most measures, notable return on equity, reasonable valuation levels and solid stock price performance. Although no company is perfect, currently we do not see any significant weaknesses which are likely to detract from the generally positive outlook."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- Despite its growing revenue, the company underperformed as compared with the industry average of 42.3%. Since the same quarter one year prior, revenues rose by 40.5%. Growth in the company's revenue appears to have helped boost the earnings per share.
- BIIB's debt-to-equity ratio is very low at 0.06 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Along with the favorable debt-to-equity ratio, the company maintains an adequate quick ratio of 1.49, which illustrates the ability to avoid short-term cash problems.
- The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. Compared to other companies in the Biotechnology industry and the overall market, BIOGEN IDEC INC's return on equity exceeds that of both the industry average and the S&P 500.
- Powered by its strong earnings growth of 46.11% and other important driving factors, this stock has surged by 59.32% over the past year, outperforming the rise in the S&P 500 Index during the same period. Turning to the future, naturally, any stock can fall in a major bear market. However, in almost any other environment, the stock should continue to move higher despite the fact that it has already enjoyed nice gains in the past year.
- You can view the full analysis from the report here: BIIB Ratings Report
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