For Immediate Release
Chicago, IL – October 27, 2010 – Zacks Equity Research highlights: Gilead Sciences (GILD) as the Bull of the Day and Linear Technology (
Full analysis of all these stocks is available at http://at.zacks.com/?id=5506.
Here is a synopsis of all five stocks:
Bull of the Day:
Gilead Sciences (GILD) third quarter 2010 earnings of $0.85 was well above the year-ago earnings of $0.74. The improved showing was mainly attributable to strong sales of antiviral products.
Gilead, a leading player in the HIV segment, has continued to increase its patient base. We remain optimistic about growth of HIV franchise drugs Truvada and Atripla. Moreover, the FDA approval of Cayston earlier this year is also a positive. The addition of Cayston to the company's portfolio should boost Gilead's revenue stream further.
We are also encouraged by Gilead's progress with its pipeline. These positive catalysts cause us to upgrade the stock to Outperform. Based on the third quarter performance, we have raised our earnings estimate for 2010 by $0.06 to $3.50 and 2011 estimates by $0.28 to $3.94.
Bear of the Day:
Linear Technology (LLTC
Therefore, we advise investors to avoid the shares, since we believe there is significant uncertainty in demand. Additionally, the considerable debt burden is a concern. Hence we have an Underperform rating on LLTC shares.
Shares are trading in the upper half of the historical range of 11.1X to 27.3X TTM earnings. This seems to indicate that prices already reflect the potential in the stock and there is limited scope for further near-term expansion.
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Biogen Beats by a Wide Margin
Biogen Idec Inc. (BIIB) reported third-quarter earnings per share of $1.33, well above the Zacks Consensus Estimate of $1.20 and the year-earlier figure of $1.09. Excluding the impact of stock-based compensation expense, third quarter 2010 earnings came in at $1.35 per share. Performance was boosted by higher revenues and lower share count. Revenues increased 5% to $1.18 billion, with Tysabri and Rituxan being the primary growth drivers. Revenues were slightly above the Zacks Consensus Estimate of $1.16 billion.
Revenue by Major Products
Third quarter Tysabri revenues came in at $221 million, up 7% from the prior period. Global in-market net sales of Tysabri, which is partnered with Elan Corp. (ELN), came in at $307 million (up 9%) in the third quarter of 2010. Tysabri global sales consisted of US sales of $151 million and ROW (Rest of the World) sales of $156 million.
Biogen estimates that as of the end of Sept. 2010, about 55,100 patients were on commercial and clinical Tysabri therapy worldwide. This represents an increase from the 52,700 patients reported by the company in the second quarter of 2010.
With Tysabri being an important growth driver for Biogen, we remain concerned that an increase in the number of progressive multifocal leukoencephalopathy (PML) cases associated with its use could lead to a slowdown in Tysabri sales going forward. We note that new patient additions during the third quarter remained flat sequentially at 2,400.
Biogen is currently conducting studies (STRATIFY 1 and STRATIFY 2) to confirm that patients who test negative on the JC virus assay could use Tysabri with lower concerns regarding the development of PML. Biogen reported that Elan presented data supporting the utility of using a JC virus assay. The companies intend to apply for label changes in both the US and the EU by the first quarter of 2011.
Meanwhile, Biogen's lead multiple sclerosis (MS) product Avonex posted second quarter sales of $644 million (up 11%).
We note that, going forward, both Avonex and Tysabri will face additional competition in the form of Novartis' (NVS) Gilenya which was launched in early Oct. Results from a study comparing Gilenya with Avonex showed that Gilenya reduced relapse rates by 52% at one year compared with Avonex. Being an oral therapy, Gilenya could find quick acceptance as currently available therapies require injection or infusion.
Meanwhile, we were disappointed to see Rituxan revenues decline 9% to $258 million in the third quarter. Biogen and partner Roche have been working on driving Rituxan growth by expanding the label for additional indications. Moreover, Biogen has been working on improving unit and market share performance of the product through greater sales efforts, improving customer segmentation and highlighting the data on the product.
Get the full analysis of all these stocks by going to http://at.zacks.com/?id=5507.
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BIOGEN IDEC INC (BIIB): Free Stock Analysis Report
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GILEAD SCIENCES (GILD): Free Stock Analysis Report
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NOVARTIS AG-ADR (NVS): Free Stock Analysis Report
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