2006 was an up and down year for Rule Breakers pick Millennium Pharmaceuticals (NASDAQ:MLNM). Shares of the biopharmaceutical company ended the year more than 10% higher, despite the presence of increased competition for its cancer treatment Velcade and all sorts of attempted merger and acquisition activity within the company.

On Friday, Millennium gave estimates for 2007 earnings and sales. Sales of Velcade are expected to be in the range of $240 million to $260 million, up a measly 10%-18% over 2006, despite the help of one of Johnson & Johnson's (NYSE:JNJ) subsidiaries in co-promoting the drug this year.

Earnings are expected to be barely above breakeven in 2007 on a non-GAAP basis for the second year in a row. But investors can take solace knowing that Millennium would be solidly profitable today if it weren't investing in its future by testing Velcade and its other compounds in so many new indications. Perhaps a potential acquirer had designs on trimming some of Millennium's more than $400 million in R&D and SG&A expenses, allowing more of its Velcade and Integrilin revenues to drop to the bottom line, when it made a bid for the company last year.

After raising another $250 million in financing a couple of months ago, Millennium now has more than $800 million in cash and equivalents sitting on its balance sheet. It already tried to use up most of that cash once last year, with its failed bid for AnorMED; Millennium has said that it will look for other drugs to in-license or companies to acquire this year as well.

Millennium is a tough company to judge. It's disappointing to see that sales of Velcade are expected to grow so slowly in 2007, and that earnings should be nearly nonexistent again. On the other hand, at least Velcade will be holding its own against growing competition from Celgene's (NASDAQ:CELG) Revlimid, and royalties from Integrilin will ascend to the low double-digit range.

With most of its drug candidates years away from any possible approval, and nearly 25% of its market capitalization covered by its cash hoard, how wisely Millennium spends this money may determine whether its investors ring in 2008 as happily as they did 2007.

Millennium is a Rule Breakers pick, while Johnson & Johnson is an Income Investor recommendation. Whatever your investing style, the Fool has a newsletter for you.

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