Revenue was up 38% year over year. Sales of Biogen’s biggest seller, multiple sclerosis drug Avonex, were up 26%, and its share of revenue from Rituxun, which it sells with Genentech
So what was the problem? Well, revenue from multiple sclerosis drug Tysabri, which Biogen sells with Elan
As fellow Fool Brian Lawler pointed out last quarter, the growth of patients coming onto Tysabri had already been slowing, but a report last summer of two new cases of a rare and often deadly brain disorder seems to have smacked down the growth of paying customers to just 11.5% quarter over quarter. Granted, that's still tremendous annualized growth, but it's not going to get Elan and Biogen to their goal of 100,000 patients on Tysabri by the end of 2010.
There’s some real risk that Tysabri won't be able to compete with other multiple sclerosis drugs -- like Teva Pharmaceuticals'
With Biogen trading at less than 13 times its expected adjusted 2008 earnings, the company is a real steal if it can continue to produce adjusted bottom-line growth in excess of 25%. While there's some risk of a slowdown, just like the risk/reward ratio for Tysabri, there seems to be a lot more reward potential than risk built into Biogen's stock price.