If you just ignore the year-over-year fundamentals, it was a great quarter for Biogen Idec
First, those numbers: Revenue was down $4 million, but let's call it flat considering the company brings in $1.2 billion a quarter. Adjusted income attributable to Biogen was down 3%, as selling and general costs rose despite the flat sales. EPS was up 4%, but that's only because the company bought back shares since this time last year. Not exactly anything to start salivating about.
Dive a little deeper, though, and things start to look more interesting. Sales of Tysabri, which Biogen markets with Elan
Tysabri works extremely well at keeping the progression of multiple sclerosis at bay, but it inhibits the immune system enough that a small number of patients develop a potentially fatal brain infection called progressive multifocal leukoencephalopathy, or PML. The key is to convince patients that the risk is worth the benefit.
Biogen has developed a test for the virus that causes PML to try and stratify the risk. If you don't have the virus in your system, your chance of developing PML is greatly reduced. The test is available in Europe, which likely explains some of the patients starting Tysabri, and Biogen expects the test will be available in the U.S. in the next few months.
While Biogen's second-quarter numbers weren't all that impressive, there doesn't seem to be any reason to think that Tysabri can't continue to accelerate, making for impressive quarters in the coming year.
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Fool contributor Brian Orelli holds no position in any company mentioned. Click here to see his holdings and a short bio. The Motley Fool owns shares of Teva Pharmaceutical Industries. Motley Fool newsletter services have recommended buying shares of Novartis, Pfizer, Elan, and Teva Pharmaceutical Industries. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.