Highlights of AQR Capital’s 3Q14 positions (Part 7 of 9)

(Continued from Part 6)

AQR raises stake in Biogen Idec

AQR Capital increased its position in Biogen Idec during the third quarter of 2014. The stock accounts for 1% of the total portfolio, up from 0.67% of the fund’s 2Q14 portfolio.

About Biogen Idec

Biogen Idec is a global biotechnology company focused on discovering, developing, manufacturing, and marketing therapies for the treatment of neurodegenerative diseases, hematologic conditions, and autoimmune disorders.

The company collaborates on development and commercialization of RITUXAN for the treatment of non-Hodgkin’s lymphoma, chronic lymphocytic leukemia, and other conditions. Biogen Idec shares profits and losses for GAZYVA for the treatment of chronic lymphocytic leukemia.

BIIB received approval for multiple sclerosis (or MS) drug PLEGRIDY in the US and Europe. The company launched Hemophilia A drug ELOCTATE in the US and TECFIDERA in several European countries, furthering its position as a leading oral MS therapy.

Strong revenue growth in 3Q14

BIIB reported revenue of $2.5 billion, a year-over-year (or YoY) increase of 37%. Non-GAAP (or generally accepted accounting principles) diluted earnings per share (or EPS) were $3.80 with YoY increase of 61%. GAAP diluted EPS were $3.62, up 77% on a YoY basis.

Biogen Idec’s revenue continued to come from its principle products like RITUXAN and MS therapy products such as AVONEX, TECFIDERA, and TYSABRI. As per company reports, “TECFIDERA is the number one oral MS treatment in the US. TECFIDERA has treated over 100,000 patients globally within just 18 months of the US launch, and only six months since EU approval.” BIIB is optimistic about TYSABRI, as physicians consider this product to be an important high-efficacy treatment option.

Strengthened research and development capabilities

Biogen Idec hired a number of highly accomplished scientists to strengthen its R&D (research and development) capabilities further. Chris Henderson joined the company as head of neurology research. Richard Ransohoff joined as vice president of neuro-immunology research. Don Johns joined to head the company’s amyotrophic lateral sclerosis (or ALS) initiative. Olivier Danos joined to head gene therapy research.

2014 financial guidance

Biogen Idec expects a YoY revenue increase of 38% to 41%, unchanged from prior guidance. The company expects R&D expense to be 20% to 21% of total revenue. GAAP diluted EPS is expected to be between $12 and $12.10. Non-GAAP diluted EPS is expected to be between $13.45 and $13.55, which increased over prior guidance primarily due to updated business development expectations.