Comparing Biogen With Industry Competitors In Biotechnology Industry

In the dynamic and cutthroat world of business, conducting thorough company analysis is essential for investors and industry experts. In this article, we will undertake a comprehensive industry comparison, evaluating Biogen BIIB and its primary competitors in the Biotechnology industry. By closely examining key financial metrics, market position, and growth prospects, our aim is to provide valuable insights for 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.

After a detailed analysis of Biogen, the following trends become apparent:

• The Price to Earnings ratio of 25.44 is 0.66x lower than the industry average, indicating potential undervaluation for the stock.

• Considering a Price to Book ratio of 2.56, which is well below the industry average by 0.35x, the stock may be undervalued based on its book value compared to its peers.

• The Price to Sales ratio is 3.73, which is 0.58x the industry average. This suggests a possible undervaluation based on sales performance.

• The Return on Equity (ROE) of -0.47% is 7.77% below the industry average, suggesting potential inefficiency in utilizing equity to generate profits.

• The Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) of $50 Million is 0.03x below the industry average, suggesting potential lower profitability or financial challenges.

• With lower gross profit of $1.87 Billion, which indicates 0.68x below the industry average, the company may experience lower revenue after accounting for production costs.

• With a revenue growth of 0.87%, which is much lower than the industry average of 3.1%, the company is experiencing a notable slowdown in sales expansion.

Debt To Equity Ratio

The debt-to-equity (D/E) ratio gauges the extent to which a company has financed its operations through debt relative to equity.

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 comparing Biogen with its top 4 peers based on the Debt-to-Equity ratio, the following insights can be observed:

• Biogen falls in the middle of the list when considering the debt-to-equity ratio.

• This indicates that the company has a moderate level of debt relative to its equity with a debt-to-equity ratio of 0.53, suggesting a balanced financial structure with a reasonable debt-equitymix.

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.