Biogen Idec (BIIB) recently announced its intention to acquire 100% of Dompé's shares in its joint ventures (JVs) in Italy and Switzerland. Biogen and Dompé had entered into a joint venture in 1997. While the joint venture was initially focused on the commercialization of Avonex, the collaboration was later expanded to include commercial, distribution and service rights for Tysabri.
Once Biogen gains full control of the joint ventures, it will have a direct commercial presence in 29 countries. The company said that the new affiliate offices will be named Biogen Idec Italia and Biogen Idec Switzerland. Financial terms of the agreement were not disclosed.
This move will allow both Biogen and Dompé to focus on their core business areas. Over the past few months, Biogen has been working on streamlining its operations.
In November 2010, the company had announced its intention to streamline its operations and increase efficiencies through the implementation of a restructuring program. The company’s restructuring program includes initiatives like streamlining of operations, shutting down of facilities, and workforce reduction.
Neutral on Biogen
We currently have a Neutral recommendation on Biogen, which carries a Zacks #3 Rank (short-term Hold rating). Key products, Avonex and Tysabri, should continue contributing significantly to sales. BG-12, if developed successfully, should drive long-term growth. Meanwhile, the company’s restructuring initiative should help drive the bottom line. We are also pleased with the company’s intention to streamline its pipeline. However, we remain concerned about the launch of Novartis’ (NVS) Gilenya which is competing with Avonex and Tysabri. The multiple sclerosis market could become more competitive with the entry of oral treatments being developed by companies like Teva (TEVA) and Sanofi-Aventis (SNY).
BIOGEN IDEC INC (BIIB): Free Stock Analysis Report
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TEVA PHARM ADR (TEVA): Free Stock Analysis Report
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