Last week, Rule Breakers pick Millennium Pharmaceuticals
Millennium's stock price rightfully adjusts to whatever the future looks like for its lead drug, VELCADE. After the third quarter, its future undeniably looks brighter. Sales of the multiple myeloma treatment, which is marketed by Millennium and partner Johnson & Johnson
Based on the greater-than-expected sales growth with VELCADE, which came mostly from increased prescription demand rather than unsustainable price hikes, Millennium upped its top- and bottom-line forecasts for the year and now expects its GAAP net loss to be only in the $30 million to $35 million range. This is nearly half the amount it was expecting its 2007 loss to be as recently as July.
Following a strongly positive phase 3 study in the front-line multiple myeloma setting, Millennium also expects to file a marketing application to expand the VELCADE label to this earlier stage treatment setting by the end of the year. This improved outlook for VELCADE is what is causing the perceived weakened outlook for rival Celgene's
As evidenced by the surge in shares of Biogen IDEC
The potential for a buyout is NEVER an appropriate reason to invest in a drugmaker, but with 10 new molecular entities in its pipeline and a better outlook for its lead drug, I wonder how long it will be until rumors about a buyout of Millennium start popping up.
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