Comparative Study: Biogen And Industry Competitors In Biotechnology Industry

In today's rapidly changing and highly competitive business world, it is imperative for investors and industry observers to carefully assess companies before making investment choices. In this article, we will undertake a comprehensive industry comparison, evaluating Biogen BIIB vis-à-vis its key competitors in the Biotechnology industry. Through a detailed analysis of important financial indicators, market standing, and growth potential, our goal is to provide valuable insights and highlight company's performance in 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.

By thoroughly analyzing Biogen, we can discern the following trends:

• At 22.74, the stock's Price to Earnings ratio is 0.43x less than the industry average, suggesting favorable growth potential.

• With a Price to Book ratio of 2.29, significantly falling below the industry average by 0.4x, it suggests undervaluation and the possibility of untapped growth prospects.

• With a relatively low Price to Sales ratio of 3.33, which is 0.64x the industry average, the stock might be considered undervalued based on sales performance.

• With a Return on Equity (ROE) of -0.47% that is 6.73% below the industry average, it appears that the company exhibits potential inefficiency in utilizing equity to generate profits.

• The Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) of $50 Million is 0.04x below the industry average, suggesting potential lower profitability or financial challenges.

• The gross profit of $1.87 Billion is 0.77x below that of its industry, suggesting potential lower revenue after accounting for production costs.

• The company's revenue growth of 0.87% is significantly lower compared to the industry average of 3.59%. This indicates a potential fall in the company's sales performance.

Debt To Equity Ratio

The debt-to-equity (D/E) ratio provides insights into the proportion of debt a company has in relation to its equity and asset value.

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.

By analyzing Biogen in relation to its top 4 peers based on the Debt-to-Equity ratio, the following insights can be derived:

• Biogen has a stronger financial position compared to its top 4 peers, as evidenced by its lower debt-to-equity ratio of 0.53.

• This suggests that the company has a more favorable balance between debt and equity, which can be perceived as a positive indicator by investors.

Key Takeaways

Biogen's low PE, PB, and PS ratios suggest that the company's stock is undervalued compared to its peers in the biotechnology industry. This indicates that investors may have an opportunity to purchase Biogen's stock at a lower price relative to its earnings, book value, and sales. Additionally, Biogen's low ROE, EBITDA, gross profit, and revenue growth ratios indicate that the company's financial performance is weaker compared to its industry peers. This suggests that Biogen may be facing challenges in generating profits, managing expenses, and driving revenue growth.

This article was generated by Benzinga's automated content engine and reviewed by an editor.