Biogen Idec finished 2013 on a high note, with its highly touted oral multiple sclerosis drug Tecfidera producing nearly $400 million in sales during the fourth quarter

The company was on pace to generate more than $1 billion in its first year on the market.

Tecfidera's performance helped Biogen (BIIB) deliver a record $1.97 billion in overall Q4 revenue.

That was up 39% from the prior year — the biotech's biggest quarterly gain in years — and slightly ahead of estimates.

Earnings for the quarter also enjoyed their biggest gain in years, rising 39% to $2.34 a share and beating expectations by 6 cents.

That's the good news. On the downside, Biogen guided 2014 profit below analyst expectations — perhaps due to higher research and development costs — though the company did guide revenue above most estimates.

Bright Spots

While the mixed forecast has fostered caution, there are plenty of reasons to be bullish on Biogen.

For one thing, Tecfidera should continue to bolster the company's top line, with sales expected to advance further in the U.S., says Karen Anderson, analyst at Morningstar. Additional sales should come from a rollout in Europe this year, starting in Germany.

Sales of other top Biogen drugs are slowing, as is typical for maturing treatments, but should produce strong numbers through much of 2014. Sales of MS therapy Avonex, Biogen's biggest seller last year, were flat in the fourth quarter at $751 million, but still beat expectations for a modest decline.

Biogen has multiple revenue drivers and should significantly boost its top and bottom lines this year. But there are questions about the pace of growth.

Anderson will keep a close watch for pricing pressure on older MS drugs if insurers push generic versions. She also wants to see a clearer picture on Biogen's midstage pipeline — drugs that could drive expansion in coming years.

Midstage pipeline drugs are important because some of the new drugs Biogen is rolling out this year could produce only a minor bump to overall sales. "We're not particularly bullish on these (new) products," Andersen said.

Biogen plans to launch a pair of drugs for hemophilia and an MS drug this year. But the market for hemophilia treatments is already crowded, and the new MS offering is essentially a longer-lasting version of an older class of drugs.

None of those new offerings is expected to perform on the level of Tecfidera, which was approved for sale last March. As Cross Current Research noted in a recent report, the three drugs slated to launch this year "may not have a 'wow' effect on the stock."

Labels: TECFIDERA