Biogen

Methodology

Biogen's neurology-focused biotech business faces significant earnings pressure from biosimilar competition to multiple sclerosis franchises and controversial Alzheimer's drug launches. The company's mature MS portfolio declining while newer products ramp creates transition complexity. This calculation requires careful assessment of which drugs drive current earnings and pipeline probability-adjusted forecasts—normalized assumptions about sustainable drug mix provide better baselines than current transition-period results.

Methodology

Biogen's PEG ratio can appear attractive given low multiples, but this reflects pipeline execution concerns and biosimilar erosion of legacy products. The company's ability to replace declining MS revenue with Alzheimer's drugs, biosimilars, and neuropsychiatry products remains uncertain. A low PEG may signal opportunity if the pipeline succeeds, or appropriately reflect the challenge of offsetting multi-billion-dollar revenue losses to biosimilar competition.

Methodology

Biogen introduced a dividend and has grown it consistently, currently yielding around 2.0-3.0%, making PEGY relevant for a biotech facing maturity. The company's strong but declining cash flows from MS products support shareholder returns even as growth slows. PEGY better captures Biogen's evolution toward a mature biotech returning capital, though dividend sustainability depends on successfully launching new neurological therapies to offset biosimilar erosion.