Biogen Posts Better Than Expected Earnings

The common thinking over the past ten years has been: that the pharmaceuticals are a great way to provide your portfolio with consistent long term growth. It did not matter if the economy was in a recession or expansion; the demand would either remain the same or increase. Yet, there have been times when various drugs were pulled off the market because of concerns. Then, after it is determined that the drug is safe, sales resume again. Only this time, sales, are more than they were before the drug was pulled off the market. Such is the case with Biogen and the controversial Tysabri; where it was pulled off of the market a few years ago pending safety concerns. Then, after the drug was reintroduced, sales skyrocketed.

Recent evidence of this can be found by looking at the current earnings report that was announced, with the company's fourth quarter earnings rising 48% on the sale of the multiple-sclerosis drug. The company also raised it 2010 forecast to $4.55 from $4.38. This is significant because the Food and Drug Administration (FDA) has continued to maintain that the drug is safe (as it was linked to a rare brain illness a few years ago.) Yet, despite this issue the FDA says that benefits of taking the drug far outweigh any kind of risks.

What this shows; is that Tysabri is quickly becoming one of the main drugs that are driving sales at the company. Baring anything unforeseen, sales of the drug could remain in a significant upward climb, as more of the aging Baby Boomers are requiring prescription drugs.