On Friday biotech drugmaker Millennium Pharmaceuticals
For the first quarter, sales of Millenium's top compound, the cancer treatment Velcade, were $59 million, up 10% in the U.S. vs. the first quarter last year. Overall revenue declined 10%, though, and operating income was once again flat, checking in at a $20 million loss. For the year, Millennium is still guiding for $240 million to $260 million in U.S. Velcade sales, which would represent growth of 9%-18% vs. 2006 Velcade sales.
Millennium's experience with Velcade is shaping up to be a lot like ImClone's
Until Millennium is able to show some extra tangible advantages to the use of Velcade over Celgene's
Barring some turn of events with Velcade, though, Millennium appears to just be spinning its financial wheels until it can move its pipeline into later-stage clinical testing. With stagnant sales growth and huge amounts of R&D expenditures, Millennium is the type of drug stock that activist hedge fund investors love to get involved with to realize a higher valuation for shares of the company. Absent this type of event, though, Millennium is not a drug stock I'd be interested in buying at this type of valuation and earnings growth -- unless the competitive landscape for Velcade improves.