Industry Comparison: Evaluating Biogen Against Competitors In Biotechnology Industry

In the fast-paced and highly competitive business world of today, conducting thorough company analysis is essential for investors and industry observers. In this article, we will conduct an extensive industry comparison, evaluating Biogen BIIB in relation to its major competitors in the Biotechnology industry. Through a detailed examination of key financial metrics, market standing, and growth prospects, our objective is to provide valuable insights and illuminate 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 conducting an in-depth analysis of Biogen, we can identify the following trends:

• At 24.76, the stock's Price to Earnings ratio is 0.67x less than the industry average, suggesting favorable growth potential.

• Considering a Price to Book ratio of 2.49, which is well below the industry average by 0.36x, the stock may be undervalued based on its book value compared to its peers.

• Based on its sales performance, the stock could be deemed undervalued with a Price to Sales ratio of 3.63, which is 0.6x the industry average.

• With a Return on Equity (ROE) of -0.47% that is 7.77% 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 0.03x below the industry average, suggesting potential lower profitability or financial challenges.

• The gross profit of $1.87 Billion is 0.68x below that of its industry, suggesting potential 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 is a measure that indicates the level of debt a company has taken on relative to the value of its assets net of liabilities.

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 considering the Debt-to-Equity ratio, Biogen can be compared to its top 4 peers, leading to the following observations:

• When evaluating the debt-to-equity ratio, Biogen is in the middle position among its top 4 peers.

• The company maintains a moderate level of debt relative to its equity with a debt-to-equity ratio of 0.53, suggesting a relatively balanced financial structure.

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.