In today's rapidly evolving and fiercely competitive business landscape, it is crucial for investors and industry analysts to conduct comprehensive company evaluations. In this article, we will undertake an in-depth industry comparison, assessing Biogen BIIB alongside its primary competitors in the Biotechnology industry. By meticulously examining crucial financial indicators, market positioning, and growth potential, we aim to provide valuable insights to investors and shed light on company's performance within the industry.
Biogen Background
Biogen and Idec merged in 2003, combining forces to market Biogen's multiple sclerosis drug Avonex and Idec's cancer drug Rituxan. Today, Rituxan and next-generation antibody Gazyva are marketed via a collaboration with Roche. Biogen also markets novel multiple sclerosis drugs Plegridy, Tysabri, Tecfidera, and Vumerity. In Japan, Biogen's MS portfolio is copromoted by Eisai. Hemophilia therapies Eloctate and Alprolix (partnered with Sobi) were spun off as part of Bioverativ in 2017. Biogen's newer products include Spinraza (SMA, with partner Ionis), Leqembi (Alzheimers, with partner Eisai), Skyclarys (Friedreich's Ataxia, Reata), Zurzuvae (post-partum depression, Sage), and Qalsody (ALS, Ionis). Biogen has several drug candidates in phase 3 trials in neurology-related fields.
| Company | P/E | P/B | P/S | ROE | EBITDA (in billions) | Gross Profit (in billions) | Revenue Growth |
|---|---|---|---|---|---|---|---|
| Biogen Inc | 22.13 | 2.23 | 3.24 | -0.47% | $0.05 | $1.87 | 0.87% |
| AbbVie Inc | 37.98 | 20.24 | 4.46 | 14.25% | $4.74 | $7.44 | -5.97% |
| Amgen Inc | 18.97 | 18.64 | 5.35 | 23.97% | $3.6 | $5.1 | 3.77% |
| Vertex Pharmaceuticals Inc | 28.45 | 5.91 | 10.22 | 6.47% | $1.23 | $2.16 | 6.39% |
| Gilead Sciences Inc | 16.04 | 4.18 | 3.45 | 10.03% | $3.23 | $5.49 | 0.11% |
| Regeneron Pharmaceuticals Inc | 22.72 | 3.49 | 6.92 | 4.12% | $1.23 | $2.93 | 14.53% |
| BioNTech SE | 8.13 | 1.10 | 3.35 | 0.81% | $0.27 | $0.24 | -74.13% |
| Genmab A/S | 34.43 | 4.71 | 8.69 | 7.11% | $2.71 | $4.64 | 16.08% |
| Biomarin Pharmaceutical Inc | 108.30 | 3.21 | 6.90 | 0.83% | $0.07 | $0.46 | 15.04% |
| Incyte Corp | 28.26 | 2.41 | 3.32 | 3.54% | $0.23 | $0.86 | -3.73% |
| Neurocrine Biosciences Inc | 58.03 | 5.41 | 6.22 | 4.31% | $0.12 | $0.49 | 28.59% |
| United Therapeutics Corp | 12.43 | 1.85 | 5.07 | 4.92% | $0.36 | $0.53 | 27.76% |
| Exelixis Inc | 72.21 | 2.77 | 3.83 | 0.04% | $-0.01 | $0.45 | 14.62% |
| Grifols SA | 220.75 | 0.92 | 0.86 | 0.99% | $0.25 | $0.63 | 3.66% |
| Average | 51.28 | 5.76 | 5.28 | 6.26% | $1.39 | $2.42 | 3.59% |
By thoroughly analyzing Biogen, we can discern the following trends:
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A Price to Earnings ratio of 22.13 significantly below the industry average by 0.43x suggests undervaluation. This can make the stock appealing for those seeking growth.
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With a Price to Book ratio of 2.23, significantly falling below the industry average by 0.39x, it suggests undervaluation and the possibility of untapped growth prospects.
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With a relatively low Price to Sales ratio of 3.24, which is 0.61x the industry average, the stock might be considered undervalued based on sales performance.
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The Return on Equity (ROE) of -0.47% is 6.73% below the industry average, suggesting potential inefficiency in utilizing equity to generate profits.
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With lower Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) of $50 Million, which is 0.04x below the industry average, the company may face lower profitability or financial challenges.
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The company has lower gross profit of $1.87 Billion, which indicates 0.77x below the industry average. This potentially indicates lower revenue after accounting for production costs.
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With a revenue growth of 0.87%, which is much lower than the industry average of 3.59%, the company is experiencing a notable slowdown in sales expansion.
Debt To Equity Ratio
The debt-to-equity (D/E) ratio helps evaluate the capital structure and financial leverage of a company.
Considering the debt-to-equity ratio in industry comparisons allows for a concise evaluation of a company's financial health and risk profile, aiding in informed decision-making.
When assessing Biogen against its top 4 peers using the Debt-to-Equity ratio, the following comparisons can be made:
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Compared to its top 4 peers, Biogen has a stronger financial position indicated by its lower debt-to-equity ratio of 0.53.
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This suggests that the company relies less on debt financing and has a more favorable balance between debt and equity, which can be seen as a positive attribute by investors.
Key Takeaways
For the valuation analysis of Biogen in the Biotechnology industry, the PE, PB, and PS ratios indicate that the company's valuation is relatively low compared to its peers. This suggests that Biogen may be undervalued in terms of its earnings, book value, and sales. However, the low ROE, EBITDA, gross profit, and revenue growth ratios indicate that Biogen's financial performance is also relatively low compared to its industry peers. This suggests that the company may be facing challenges in generating profits, managing expenses, and achieving revenue growth.
This article was generated by Benzinga's automated content engine and reviewed by an editor.
© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
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