Valuing biopharmaceutical companies is oftentimes more art than science, especially with ones that teeter on the edge of profitability or have a large chunk of their value encased in their pipeline. Millennium Pharmaceuticals (NASDAQ:MLNM) is one of these hard-to-value companies, but based on its prospects for sales and revenue growth, it looks expensive to me.

Millennium, a Rule Breakers recommendation, released its third-quarter results last week, and revenues came in at $104 million. While these overall results can't exactly be compared with last year's third-quarter revenues of $202 million -- because Millennium signed a royalty agreement rather than marketing one of its drugs itself -- sales are slowing down for the company's lead product, Velcade, for use in multiple myeloma, or bone cancer.

U.S. Velcade Sales (in Millions)

Year-Over-Year Growth

Q4 2006*

$54.7

4.4%

Q3 2006

$53.2

4.5%

Q2 2006

$58.8

33.9%

Q1 2006

$53.4

19.2%
*Company estimates

Notice how Velcade sales growth slowed significantly in the third quarter and is expected to remain low in the fourth quarter. This is most likely because of Celgene's (NASDAQ:CELG) competing product, Revlimid, getting approved as a second-line treatment for multiple myeloma in June. Supporting this hypothesis, Millennium lowered its guidance for 2006 Velcade sales to "approximately $220 million" rather than the $225 million to $250 million it had expected earlier in the year.

Third-quarter earnings, adjusted for restructuring and other one-time charges, came in at $6.4 million, compared with a $6.5 million loss last year. For all of 2006, Millennium upped its estimates for non-GAAP net income to $30 million to $35 million, rather than its previous guidance of $5 million. Much of this is because the company is getting a $25 million milestone payment in Q4 that it didn't expect to receive until next year, plus $19.5 million for its failed bid for AnorMED (NASDAQ:ANOR) -- not because of any material improvement in operations.

There's not much that particularly excites me about Millennium at this $3.7 billion market cap. On a GAAP basis (generally accepted accounting principles), the company will lose more than $50 million this year. Millennium doesn't have a very deep pipeline, which I find ironic, given the company's propensity to tout its research and development productivity. None of its drug candidates is in late-stage testing and all are years away from approval, except for follow-on indications for Velcade. Combining this with the increased near-term competition for Velcade and its slowing sales growth just makes Millennium too rich for my blood. I think I'll pass.

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Fool contributor Brian Lawler does not own shares of any company mentioned in this article. The Fool has a disclosure policy.