William Blair & Company Initiates Coverage of Four Leading Biotechnology Companies, Reinitiates Coverage of Another
Posted on: Tuesday, 8 November 2005, 12:00 CST
CHICAGO, Nov. 8 /PRNewswire/ -- William Blair & Company today announced that it initiated research coverage of four leading biotechnology companies -- Amgen Inc. ($79.89), Genzyme Corporation ($71.60), Gilead Sciences, Inc. ($49.87), and MedImmune Inc. ($34.94), and reinitiated coverage of Genentech, Inc. ($93.11). Amgen, Genzyme, and MedImmune are rated Outperform and Genentech and Gilead are rated Market Perform.
Analyst John Sonnier, in a comprehensive report on the broader biotechnology universe, noted that the industry, which has been validated over the past five years by several breakthrough drugs, appears well positioned for long-term growth.
"We expect innovation to continue to fuel growth of the sector's product pipeline, which should in turn drive top-line growth, profitability expansion, and increased shareholder value," he added. "We also believe that the biotechnology pipeline should become increasingly appealing to the pharmaceutical industry, which seems strained for organic growth in many instances."
Sonnier said he believes that Amgen, the world's largest biotechnology company, has the most exciting late-stage product pipeline in the industry. "The combination of new drugs in Phase III, as well as the company's development efforts with follow-on indications for existing drugs, should drive significant growth into the end of the decade," he noted.
Genzyme, with established businesses in the rare genetic diseases, orthopedics, renal disease, oncology, and transplant/immunology, "has a global and diversified platform that should position the company to achieve its long-term earnings growth goal of 20%," Sonnier said.
MedImmune, whose therapeutic focus is in the areas of infectious disease and cancer, also has a strong late-stage product pipeline, according to Sonnier. "In total, we count 4 marketed drugs and 12 clinical candidates, 4 of which are in Phase II or higher. We expect the late-stage product candidates to drive a significant level of visibility over the coming year, and expect the progression of the company's mid- and early-stage initiatives to gain increased visibility during the same period."
Sonnier said that Genentech, which is focused on the development of drugs for the treatment of cancer and inflammatory disease, is the best growth stock in the large-cap biotechnology arena. Its valuation, however, warrants a Market Perform rating, he said.
Gilead, which has a successful record in the discovery, development, and commercialization of drugs to treat infectious diseases, is the most profitable of the established biotechnology companies, Sonnier estimated. But its strong performance over the last two years, coupled with a dearth of programs in midstage development, could make growth more difficult to come by in the next two years, thus the Market Perform rating, he said.
William Blair & Company, L.L.C. ( http://www.williamblair.com/ ) is a Chicago-based investment firm offering investment banking, asset management, equity research, institutional and private brokerage, and private capital to individual, institutional, and issuing clients. Since 1935, we have been committed to helping clients achieve their financial objectives. As an independent, employee-owned firm, our philosophy is to serve our clients' interests first and foremost. We place a high value on the enduring nature of our client relationships, the quality of our products and services, and the continuity and integrity of our people. William Blair & Company has offices in Chicago, Hartford, London, San Francisco, Tokyo, Vaduz, and Zurich.
William Blair & Company, L.L.C. is a market maker in the securities of Amgen Inc., Genzyme Corporation, Gilead Sciences, Inc., and MedImmune Inc. and may have a long or short position.
For important disclosures and information regarding the firm's rating system, valuation methods and potential conflicts of interest, please visit: http://www.williamblair.com/pages/news_story_dept.asp?uid=927&depID=4
Additional information is available upon request.
William Blair & Company, L.L.C. is a member of the National Association of Securities Dealers, CRD number 1252.
William Blair & Company
CONTACT: Tony Zimmer of William Blair & Company, L.L.C.,+1-312-364-8611, tzimmer@williamblair.com
Web site: http://www.williamblair.com/
Source: PRNewswire
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