Biotechnology Stock

These are my opinions on some stocks that I follow and/or own. They are not to be considered as investment advice. I will try to post as many accurate facts as I can. If you disagree with my opinions or have noticed an error in my statements feel free to send me your comments. Please do not follow my advice unless you are willing to lose money without blaming me or taking legal actions! I encourage you to do your own homework and understand the risks before making any investments.

Thursday, December 13, 2007

Biogen-Idec (BIIB), from one extreme to the other in no time!

On Ocotber 16th, shares of Biogen-Idec (BIIB) gained $13 to hit $82 based on rumors that the company had put itself up for sale. That day I recommended an aggressive sell because of the price tag and uncertainties around finding a possible suitor. (Here is the Link to that article)

Today Biogen-Idec announced that it did not find a buyer and it was going to continue as a stand alone company. BIIB shares lost about $20 and was trading as low as $54, much lower than its share price before all the rumors began when the stock was in the $60s.

I like BIIB once again based on valuations and oversold technical conditions. The company is expected to earn over $3 share in 2008 which puts the forward PE at a cheap 18. Tysabri, their expensive treatment for MS, will continue to gain momentum in 2008 and the company expects to have 100,000 patients enrolled by 2010.

Disclosure: The author has a long position in Biogen-Idec.