Credit Suisse is making a change in its Global Biotechnology outlook and says the is ‘room to run on generalist interest.’ Biogen Idec Inc. (NASDAQ: BIIB) is named as Credit Suisse’s preferred choice in the sector, which is a switch from Amgen Inc. (NASDAQ: AMGN). The report noted, “Biotech is off to its best start in a long time. In our view, there remains room for further significant performance driven by these factors”:
(1) generalist interest in identifiable, high-quality, “defensive” growth,
(2) reasonable valuations,
(3) the wildcard possibility of continued upside from M&A,
(4) the sector’s continued innovation uptick and
(5) 2012 is more of a year of commercial execution rather than clinical data, which reduces the sector’s risk profile.
Biogen is trading at $121.56 against a 52-week trading range of $65.39 to $123.23; and Amgen is trading at $69.17 against a 52-week trading range of $47.66 to $70.00. Amgen is worth $55 billion and Biogen Idec is worth $29.5 billion. As a reminder, Amgen is the one that pays a dividend now.
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