After Merrill Lynch analyst Eric Hecht lowered his rating on Biogen tointermediate-term neutral from accumulate and also reduced his earnings estimates for this year and next, the company's shares closed down (see page 8) in trading that was three times the average daily volume.
Noting that on the current stable of product candidates it seems unlikely that any new sources of product revenues will appear until 2001, along with concerns over dull US and slow European sales of Avonex (interferon beta-1a), Mr Hecht also lowered his long-term rating on the company to accumulate from buy.
However, David Stone of Cowen & Co felt the market's over-reaction to the downgrade created a buying opportunity. Most issues in the Merrill report are not news, he said; the previous share price had already reflected those concerns. With few worries about the firm, Mr Stone has maintained his buy rating on the stock. The stock price will "continue to go up at a decent clip" over the next few years, he said.
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