NEW YORK (AP) — A BMO Capital Markets analyst started coverage of biotech drugmakers with Thursday with an "Outperform" rating, saying shares of large biotechnology companies like Amgen Inc. and Celgene Corp. should do better than traditional drugmaker stocks.
Analyst Jim Birchenough said he thinks that profits for bellwethers like Amgen and Celgene will grow steadily through 2014. Birchenough said sales of Amgen's bone drug Xgeva will continue to surpass analyst expectations, while its pipeline of experimental drugs, which includes the cancer drug OncoVex and treatments for bone disease and high cholesterol, is being given "no credit" by Wall Street. Birchenough set a target of $67 on Amgen shares.
He said sales of Celgene's cancer drug Revlimid will improve as the drug gets new approvals, takes greater market share in the U.S. and European Union, and as doctors continue to use the drug for longer periods of time. He set a $90 target on the stock.
Shares of Amgen, which is based in Thousand Oaks, Calif., slipped 19 cents to $55.19 in afternoon trading. Shares of Summit, N.J.-based Celgene rose 82 cents to $61.08.
Birchenough said his top choices for mid-cap biotechnology companies are Human Genome Sciences Inc., Regeneron Pharmaceuticals Inc., and United Therapeutics Corp., while his small-cap recommendations are Ariad Pharmaceuticals Inc., Cardiome Pharma Corp., Isis Pharmaceuticals Inc., and Rigel Pharmaceuticals Inc.
Regeneron shares added $2.18, or 3.1 percent, to $73.45, while the remaining picks posted declines or smaller increases. Overall the markets edged lower.