Intrinsic value of Biogen - BIIB

Previous Close

$341.24

  Intrinsic Value

$391.01

stock screener

  Rating & Target

hold

+15%

Previous close

$341.24

 
Intrinsic value

$391.01

 
Up/down potential

+15%

 
Rating

hold

We calculate the intrinsic value of BIIB stock by summing up the current values of future distributable cash flows generated by the company and dividing the sum by the number of outstanding shares. As such, the intrinsic value calculation depends entirely on projections. The more accurate your projections of the company's performance are - the more reliable is the intrinsic value calculation result. Please make sure to check the stock valuation input data below and adjust it if necessary. The quality of the output (intrinsic valuation result) is only as good as the quality of the input. See also DISCLAIMERS.

STOCK VALUATION INPUT DATA

Revenue (in 0001), $M
Initial revenue growth rate, %
Terminal revenue growth rate, %
Revenue decline factor
Initial discount rate, %
Discount rate multiplier
Variable cost ratio, %
Fixed operating expenses, $M
Interest rate on debt, %
Effective corporate tax rate, %
Production assets / Revenue, %
Life of production assets, yrs
Working capital / Revenue, %
Revenue / Adjusted assets
Adjusted equity ratio
Cash flow adjustment, % of Revenue
Book value of equity, $M
Shares outstanding, mln
Market capitalization, $bln 72.0

 

FINANCIAL STATEMENTS FORECAST and PRESENT VALUE CALCULATION

Fiscal year
   2
   3
   4
   5
   6
   7
   8
   9
   10
   11
   12
   13
   14
   15
   16
   17
   18
   19
   20
   21
   22
   23
   24
   25
   26
   27
   28
   29
   30
   31

INCOME STATEMENT

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenue growth rate, %
  9.00
  8.60
  8.24
  7.92
  7.62
  7.36
  7.13
  6.91
  6.72
  6.55
  6.39
  6.26
  6.13
  6.02
  5.92
  5.82
  5.74
  5.67
  5.60
  5.54
  5.49
  5.44
  5.39
  5.35
  5.32
  5.29
  5.26
  5.23
  5.21
  5.19
Revenue, $m
  13,379
  14,529
  15,726
  16,971
  18,265
  19,610
  21,007
  22,459
  23,969
  25,539
  27,172
  28,872
  30,642
  32,485
  34,407
  36,410
  38,501
  40,683
  42,961
  45,341
  47,829
  50,430
  53,150
  55,996
  58,974
  62,092
  65,357
  68,777
  72,360
  76,114
Variable operating expenses, $m
  7,268
  7,820
  8,394
  8,991
  9,612
  10,257
  10,927
  11,624
  12,348
  13,101
  13,033
  13,848
  14,697
  15,582
  16,503
  17,464
  18,467
  19,513
  20,606
  21,748
  22,941
  24,189
  25,493
  26,858
  28,287
  29,782
  31,349
  32,989
  34,707
  36,508
Fixed operating expenses, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Total operating expenses, $m
  7,268
  7,820
  8,394
  8,991
  9,612
  10,257
  10,927
  11,624
  12,348
  13,101
  13,033
  13,848
  14,697
  15,582
  16,503
  17,464
  18,467
  19,513
  20,606
  21,748
  22,941
  24,189
  25,493
  26,858
  28,287
  29,782
  31,349
  32,989
  34,707
  36,508
Operating income, $m
  6,110
  6,709
  7,332
  7,980
  8,653
  9,353
  10,080
  10,836
  11,621
  12,438
  14,139
  15,024
  15,944
  16,904
  17,904
  18,946
  20,034
  21,169
  22,355
  23,593
  24,888
  26,241
  27,657
  29,137
  30,687
  32,310
  34,009
  35,788
  37,653
  39,606
EBITDA, $m
  7,707
  8,370
  9,059
  9,776
  10,522
  11,296
  12,101
  12,938
  13,807
  14,712
  15,653
  16,632
  17,651
  18,713
  19,820
  20,974
  22,178
  23,435
  24,748
  26,119
  27,552
  29,050
  30,617
  32,256
  33,972
  35,768
  37,649
  39,619
  41,683
  43,846
Interest expense (income), $m
  281
  321
  374
  430
  488
  549
  612
  677
  745
  815
  889
  965
  1,044
  1,127
  1,213
  1,302
  1,395
  1,493
  1,594
  1,700
  1,811
  1,926
  2,047
  2,173
  2,306
  2,444
  2,588
  2,740
  2,898
  3,064
  3,238
Earnings before tax, $m
  5,790
  6,335
  6,902
  7,491
  8,104
  8,741
  9,403
  10,091
  10,806
  11,549
  13,174
  13,979
  14,818
  15,691
  16,601
  17,551
  18,541
  19,575
  20,655
  21,783
  22,961
  24,194
  25,483
  26,832
  28,244
  29,721
  31,269
  32,890
  34,588
  36,368
Tax expense, $m
  1,563
  1,710
  1,863
  2,023
  2,188
  2,360
  2,539
  2,725
  2,918
  3,118
  3,557
  3,774
  4,001
  4,237
  4,482
  4,739
  5,006
  5,285
  5,577
  5,881
  6,200
  6,532
  6,880
  7,245
  7,626
  8,025
  8,443
  8,880
  9,339
  9,819
Net income, $m
  4,226
  4,624
  5,038
  5,469
  5,916
  6,381
  6,864
  7,366
  7,888
  8,431
  9,617
  10,205
  10,817
  11,455
  12,119
  12,812
  13,535
  14,290
  15,078
  15,901
  16,762
  17,662
  18,603
  19,587
  20,618
  21,697
  22,826
  24,010
  25,249
  26,549

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Total assets, $m
  25,435
  27,622
  29,898
  32,265
  34,725
  37,281
  39,938
  42,699
  45,569
  48,553
  51,658
  54,889
  58,254
  61,759
  65,412
  69,221
  73,196
  77,344
  81,675
  86,200
  90,930
  95,874
  101,045
  106,456
  112,118
  118,046
  124,254
  130,755
  137,567
  144,704
Adjusted assets (=assets-cash), $m
  25,435
  27,622
  29,898
  32,265
  34,725
  37,281
  39,938
  42,699
  45,569
  48,553
  51,658
  54,889
  58,254
  61,759
  65,412
  69,221
  73,196
  77,344
  81,675
  86,200
  90,930
  95,874
  101,045
  106,456
  112,118
  118,046
  124,254
  130,755
  137,567
  144,704
Revenue / Adjusted assets
  0.526
  0.526
  0.526
  0.526
  0.526
  0.526
  0.526
  0.526
  0.526
  0.526
  0.526
  0.526
  0.526
  0.526
  0.526
  0.526
  0.526
  0.526
  0.526
  0.526
  0.526
  0.526
  0.526
  0.526
  0.526
  0.526
  0.526
  0.526
  0.526
  0.526
Average production assets, $m
  7,452
  8,093
  8,760
  9,453
  10,174
  10,923
  11,701
  12,510
  13,351
  14,225
  15,135
  16,082
  17,067
  18,094
  19,165
  20,281
  21,445
  22,660
  23,929
  25,255
  26,641
  28,089
  29,604
  31,190
  32,849
  34,585
  36,404
  38,309
  40,305
  42,396
Working capital, $m
  896
  973
  1,054
  1,137
  1,224
  1,314
  1,407
  1,505
  1,606
  1,711
  1,821
  1,934
  2,053
  2,177
  2,305
  2,440
  2,580
  2,726
  2,878
  3,038
  3,205
  3,379
  3,561
  3,752
  3,951
  4,160
  4,379
  4,608
  4,848
  5,100
Total debt, $m
  6,932
  7,967
  9,043
  10,163
  11,326
  12,536
  13,792
  15,098
  16,456
  17,867
  19,336
  20,864
  22,456
  24,114
  25,842
  27,643
  29,523
  31,485
  33,534
  35,674
  37,911
  40,250
  42,696
  45,255
  47,934
  50,737
  53,674
  56,749
  59,971
  63,347
Total liabilities, $m
  12,031
  13,065
  14,142
  15,261
  16,425
  17,634
  18,890
  20,196
  21,554
  22,966
  24,434
  25,963
  27,554
  29,212
  30,940
  32,742
  34,622
  36,584
  38,632
  40,773
  43,010
  45,348
  47,794
  50,354
  53,032
  55,836
  58,772
  61,847
  65,069
  68,445
Total equity, $m
  13,404
  14,557
  15,756
  17,003
  18,300
  19,647
  21,047
  22,502
  24,015
  25,588
  27,224
  28,927
  30,700
  32,547
  34,472
  36,480
  38,574
  40,760
  43,043
  45,428
  47,920
  50,526
  53,251
  56,102
  59,086
  62,210
  65,482
  68,908
  72,498
  76,259
Total liabilities and equity, $m
  25,435
  27,622
  29,898
  32,264
  34,725
  37,281
  39,937
  42,698
  45,569
  48,554
  51,658
  54,890
  58,254
  61,759
  65,412
  69,222
  73,196
  77,344
  81,675
  86,201
  90,930
  95,874
  101,045
  106,456
  112,118
  118,046
  124,254
  130,755
  137,567
  144,704
Debt-to-equity ratio
  0.520
  0.550
  0.570
  0.600
  0.620
  0.640
  0.660
  0.670
  0.690
  0.700
  0.710
  0.720
  0.730
  0.740
  0.750
  0.760
  0.770
  0.770
  0.780
  0.790
  0.790
  0.800
  0.800
  0.810
  0.810
  0.820
  0.820
  0.820
  0.830
  0.830
Adjusted equity ratio
  0.527
  0.527
  0.527
  0.527
  0.527
  0.527
  0.527
  0.527
  0.527
  0.527
  0.527
  0.527
  0.527
  0.527
  0.527
  0.527
  0.527
  0.527
  0.527
  0.527
  0.527
  0.527
  0.527
  0.527
  0.527
  0.527
  0.527
  0.527
  0.527
  0.527

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  4,226
  4,624
  5,038
  5,469
  5,916
  6,381
  6,864
  7,366
  7,888
  8,431
  9,617
  10,205
  10,817
  11,455
  12,119
  12,812
  13,535
  14,290
  15,078
  15,901
  16,762
  17,662
  18,603
  19,587
  20,618
  21,697
  22,826
  24,010
  25,249
  26,549
Depreciation, amort., depletion, $m
  1,596
  1,660
  1,727
  1,797
  1,869
  1,943
  2,021
  2,102
  2,186
  2,274
  1,513
  1,608
  1,707
  1,809
  1,916
  2,028
  2,144
  2,266
  2,393
  2,526
  2,664
  2,809
  2,960
  3,119
  3,285
  3,459
  3,640
  3,831
  4,030
  4,240
Funds from operations, $m
  5,823
  6,285
  6,765
  7,265
  7,785
  8,325
  8,885
  9,468
  10,075
  10,705
  11,131
  11,813
  12,524
  13,264
  14,036
  14,840
  15,680
  16,556
  17,471
  18,427
  19,426
  20,471
  21,563
  22,706
  23,903
  25,155
  26,467
  27,841
  29,280
  30,788
Change in working capital, $m
  74
  77
  80
  83
  87
  90
  94
  97
  101
  105
  109
  114
  119
  124
  129
  134
  140
  146
  153
  159
  167
  174
  182
  191
  200
  209
  219
  229
  240
  252
Cash from operations, $m
  5,749
  6,208
  6,685
  7,182
  7,698
  8,234
  8,792
  9,371
  9,973
  10,600
  11,021
  11,699
  12,405
  13,140
  13,907
  14,706
  15,540
  16,410
  17,318
  18,267
  19,259
  20,296
  21,381
  22,516
  23,703
  24,946
  26,248
  27,611
  29,040
  30,537
Maintenance CAPEX, $m
  -684
  -745
  -809
  -876
  -945
  -1,017
  -1,092
  -1,170
  -1,251
  -1,335
  -1,423
  -1,513
  -1,608
  -1,707
  -1,809
  -1,916
  -2,028
  -2,144
  -2,266
  -2,393
  -2,526
  -2,664
  -2,809
  -2,960
  -3,119
  -3,285
  -3,459
  -3,640
  -3,831
  -4,030
New CAPEX, $m
  -612
  -641
  -667
  -693
  -721
  -749
  -778
  -809
  -841
  -874
  -910
  -947
  -986
  -1,027
  -1,070
  -1,116
  -1,164
  -1,215
  -1,269
  -1,326
  -1,386
  -1,449
  -1,515
  -1,585
  -1,659
  -1,737
  -1,819
  -1,905
  -1,996
  -2,091
Cash from investing activities, $m
  -1,296
  -1,386
  -1,476
  -1,569
  -1,666
  -1,766
  -1,870
  -1,979
  -2,092
  -2,209
  -2,333
  -2,460
  -2,594
  -2,734
  -2,879
  -3,032
  -3,192
  -3,359
  -3,535
  -3,719
  -3,912
  -4,113
  -4,324
  -4,545
  -4,778
  -5,022
  -5,278
  -5,545
  -5,827
  -6,121
Free cash flow, $m
  4,453
  4,822
  5,209
  5,612
  6,032
  6,468
  6,921
  7,392
  7,882
  8,390
  8,689
  9,239
  9,811
  10,407
  11,027
  11,673
  12,347
  13,050
  13,783
  14,549
  15,348
  16,184
  17,057
  17,970
  18,925
  19,925
  20,971
  22,066
  23,213
  24,415
Issuance/(repayment) of debt, $m
  994
  1,035
  1,077
  1,119
  1,164
  1,209
  1,257
  1,306
  1,358
  1,412
  1,469
  1,528
  1,591
  1,658
  1,728
  1,802
  1,880
  1,962
  2,049
  2,140
  2,237
  2,339
  2,446
  2,559
  2,678
  2,804
  2,936
  3,075
  3,222
  3,376
Issuance/(repurchase) of shares, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash from financing (excl. dividends), $m  
  994
  1,035
  1,077
  1,119
  1,164
  1,209
  1,257
  1,306
  1,358
  1,412
  1,469
  1,528
  1,591
  1,658
  1,728
  1,802
  1,880
  1,962
  2,049
  2,140
  2,237
  2,339
  2,446
  2,559
  2,678
  2,804
  2,936
  3,075
  3,222
  3,376
Total cash flow (excl. dividends), $m
  5,446
  5,856
  6,286
  6,732
  7,196
  7,677
  8,178
  8,698
  9,239
  9,802
  10,158
  10,767
  11,403
  12,065
  12,755
  13,475
  14,227
  15,012
  15,832
  16,689
  17,585
  18,522
  19,503
  20,529
  21,603
  22,728
  23,907
  25,141
  26,435
  27,791
Retained Cash Flow (-), $m
  -1,112
  -1,153
  -1,199
  -1,247
  -1,296
  -1,347
  -1,400
  -1,455
  -1,513
  -1,573
  -1,636
  -1,703
  -1,773
  -1,847
  -1,925
  -2,008
  -2,094
  -2,186
  -2,283
  -2,385
  -2,492
  -2,606
  -2,725
  -2,851
  -2,984
  -3,124
  -3,271
  -3,426
  -3,590
  -3,761
Prev. year cash balance distribution, $m
  321
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash flow adjustment, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash available for distribution, $m
  4,655
  4,704
  5,086
  5,485
  5,899
  6,330
  6,778
  7,243
  7,727
  8,229
  8,521
  9,065
  9,630
  10,218
  10,830
  11,468
  12,133
  12,826
  13,549
  14,304
  15,093
  15,917
  16,778
  17,678
  18,619
  19,605
  20,636
  21,715
  22,845
  24,029
Discount rate, %
  4.30
  4.52
  4.74
  4.98
  5.23
  5.49
  5.76
  6.05
  6.35
  6.67
  7.00
  7.35
  7.72
  8.11
  8.51
  8.94
  9.39
  9.86
  10.35
  10.87
  11.41
  11.98
  12.58
  13.21
  13.87
  14.56
  15.29
  16.05
  16.86
  17.70
PV of cash for distribution, $m
  4,463
  4,306
  4,426
  4,516
  4,573
  4,594
  4,579
  4,527
  4,438
  4,314
  4,047
  3,868
  3,661
  3,430
  3,179
  2,914
  2,640
  2,362
  2,086
  1,818
  1,561
  1,321
  1,100
  900
  724
  572
  443
  336
  249
  181
Current shareholders' claim on cash, %
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0

Biogen Inc. is a biopharmaceutical company. The Company focuses on discovering, developing, manufacturing and delivering therapies to people living with serious neurological, rare and autoimmune diseases. The Company markets products, including TECFIDERA, AVONEX, PLEGRIDY, TYSABRI, ZINBRYTA and FAMPYRA for multiple sclerosis (MS), FUMADERM for the treatment of severe plaque psoriasis and SPINRAZA for the treatment of spinal muscular atrophy (SMA). It also has a collaboration agreement with Genentech, Inc. (Genentech), a member of the Roche Group, with respect to RITUXAN for the treatment of non-Hodgkin's lymphoma, chronic lymphocytic leukemia (CLL) and other conditions, GAZYVA indicated for the treatment of CLL and follicular lymphoma, and other anti-CD20 therapies. The Company's product candidate includes OCREVUS; Biosimilar adalimumab; Aducanumab; E2609; BIIB074; BAN2401; Opicinumab; CIRARA; BIIB061; BIIB054; BIIB067, and BIIB068.

FINANCIAL RATIOS  of  Biogen (BIIB)

Valuation Ratios
P/E Ratio 19.9
Price to Sales 6.4
Price to Book 6.1
Price to Tangible Book
Price to Cash Flow 16.3
Price to Free Cash Flow 19.4
Growth Rates
Sales Growth Rate 6.4%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate 13.2%
Cap. Spend. - 3 Yr. Gr. Rate -27%
Financial Strength
Quick Ratio 979
Current Ratio 0.1
LT Debt to Equity 53.6%
Total Debt to Equity 53.7%
Interest Coverage 19
Management Effectiveness
Return On Assets 18.5%
Ret/ On Assets - 3 Yr. Avg. 20.8%
Return On Total Capital 21.4%
Ret/ On T. Cap. - 3 Yr. Avg. 25.3%
Return On Equity 34.4%
Return On Equity - 3 Yr. Avg. 33.3%
Asset Turnover 0.5
Profitability Ratios
Gross Margin 87.1%
Gross Margin - 3 Yr. Avg. 87.8%
EBITDA Margin 51.5%
EBITDA Margin - 3 Yr. Avg. 50%
Operating Margin 45%
Oper. Margin - 3 Yr. Avg. 43.8%
Pre-Tax Margin 43.1%
Pre-Tax Margin - 3 Yr. Avg. 42.7%
Net Profit Margin 32.3%
Net Profit Margin - 3 Yr. Avg. 31.8%
Effective Tax Rate 25.1%
Eff/ Tax Rate - 3 Yr. Avg. 24.8%
Payout Ratio 0%

BIIB stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the BIIB stock intrinsic value calculation we used $12273.9 million for the last fiscal year's total revenue generated by Biogen. The default revenue input number comes from 0001 income statement of Biogen. You may change it if you feel that it should be adjusted for some unusual circumstances that are not expected to be repeated in the future or if you already know (from interim financial statements, for example) that this year's revenue is going to be quite different.

Revenue growth rate. Forecasted future revenue growth rate is the most important input parameter for the intrinsic value calculation. Unlike other input parameters that are reasonably expected to be in line with their historic averages or their historic trends, the revenue growth rate by and large is a wild card: nobody really knows what the company's revenue will be in the future. Of course, the level of unpredictability is different for different industries (utility companies being the most predictable and, thus, less risky).
    We use three input parameters to forecast the revenue growth rate in our BIIB stock valuation model: a) initial revenue growth rate of 9% whose default value is the revenue growth rate in the most recent quarter compared to the quarterly revenue a year ago; b) terminal revenue growth rate of 5% whose default value is chosen to be close to the average nominal (i.e. not adjusted for inflation) GDP growth rate; and c) revenue decline factor of 0.9, which stipulates that revenue growth rate in each forecasted year will be equal to the difference of the revenue growth rate in the preceding year and the terminal revenue growth rate multiplied by this revenue decline factor (with the passage of time the revenue growth rate will be approaching the terminal revenue growth rate, but not quite reaching it - though the difference could be infinitesimally small).
    At the revenue decline factor of 1, the future revenue growth rate is forecasted to be constant and equal to the initial revenue growth rate. The smaller the revenue decline factor, the faster the revenue growth rate will approach the terminal revenue growth.

Discount rate. The discount rate is used for determining the present value of future cash flows: future cash flows are "discounted" as at normal conditions (that translate into positive expected return on investment) one dollar today is worth more than the same dollar in the future. Unlike all other valuation models, we use variable discount rate, i.e. it increases for each consecutive year. This is done to account for higher risk of cash flows coming in further in the future.
    The initial discount rate of 4.3%, whose default value for BIIB is calculated based on our internal credit rating of Biogen, is applied to the cash flow expected to be received a year from now (well, actually, to be precise, in the financial year following the base year - the last year for which we have financial statements). For each consecutive year the discount rate is multiplied by the discount rate multiplier of 1.05, e.i. each year it increases by 5%. Feel free to change this number to correspond to your level of risk assessment of Biogen.
    By the way, it is easy to set the discount rate to be constant (this would make comparison with other valuation models easier): just set the discount rate multiplier equal to 1 and chose the magnitude of the initial discount rate to your liking.

Variable cost ratio is the ratio of variable costs (i.e. costs that fluctuate with fluctuation of the volume of production) to the revenue expressed as a percentage. In the calculation of intrinsic value of BIIB stock the variable cost ratio is equal to 54.9%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $0 million in the base year in the intrinsic value calculation for BIIB stock. These expenses increase with the level of inflation in subsequent years.

Interest rate on debt is the average all-in rate of interest paid by the company on its debt. It is set at 5.4% for Biogen.

Corporate tax rate of 27% is the nominal tax rate for Biogen. In reality, companies find ways to pay much less taxes than that or not to pay them at all.

Cash flow adjustment could be used for any adjustment the investor deems necessary. Most commonly we use this field to account for stock options-related effects in excess of what is reported on the company's income statement. The cash flow adjustment is expressed as a percentage of the revenue, and in the current valuation of the BIIB stock is equal to 0%.

Production assets are the company's assets used for manufacturing products or provision of services. In the valuation model input table they are expressed as a percentage of revenue and for BIIB are equal to 55.7%.

Life of production assets of 10 years is the average useful life of capital assets used in Biogen operations. It is used to calculate yearly capital expenditures needed to keep these assets in good order - we call it the maintenance CAPEX.

Working capital is the difference between the company's current assets and liabilities. In the model we use the ratio of working capital to revenue, which for BIIB is equal to 6.7%. A negative number means that the company is apt at using financial resources of its suppliers and customers; a large positive number, on the other hand, means that it either provides in-kind financing to others or is not good at managing its inventories.

Book value of equity - $12612.8 million for Biogen - is used in calculation of the "floor" for intrinsic valuation based on the discounted cash flow (DCF) method. Even if the prospects are very bad for a company, its assets could always be sold now for their current fair market value.

Shares outstanding of 211.008 million for Biogen is needed to calculate the intrinsic value of one share.

Market capitalization is used here only for reference purposes and as a quick check that the share price and the number of shares outstanding numbers are correct - something especially to be cognizant about at stock splits. So, the market capitalization of Biogen at the current share price and the inputted number of shares is $72.0 billion.

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COMPANY NEWS

▶ U.S. Probes Drugmakers Over Free Services   [Sep-22-18 12:35AM  The Wall Street Journal]
▶ U.S. Probes Drugmakers Over Free Services   [Sep-21-18 03:23PM  The Wall Street Journal]
▶ Biogen Seen Rising 15% On Brighter Outlook   [11:30AM  Investopedia]
▶ 3 High-Quality Biotech Companies for 4th Quarter   [Sep-17-18 06:13PM  GuruFocus.com]
▶ Better Buy: Celgene Corp. vs. Biogen   [10:09AM  Motley Fool]
▶ Better Buy: Gilead Sciences, Inc. vs. Biogen   [Sep-13-18 08:53AM  Motley Fool]
▶ What you missed on your summer vacation in Mass. biotech news   [05:36AM  American City Business Journals]
▶ Gene Editing is a Major Technology to Watch   [Aug-27-18 01:12PM  InvestorPlace]
▶ 3 Terrible Stocks for Retirees   [Aug-22-18 08:17AM  Motley Fool]
▶ Why Biogen's Stock Ripped Higher in July   [Aug-11-18 02:30PM  Motley Fool]
▶ 4 Biotech Stocks That May Fall By as Much as 13%   [Aug-10-18 02:00PM  Investopedia]
▶ Stifel: Biogen can rally to $394   [01:51PM  CNBC Videos]
▶ 5 Stocks That Should Start Paying Dividends   [Aug-06-18 09:37PM  Kiplinger]
▶ Adding Biotech ETFs to Your Portfolio   [Aug-02-18 12:55PM  Investopedia]
▶ Fired Biogen employee sues company for retaliation   [05:43AM  American City Business Journals]
▶ Collaborations Help Alkermes Flip to Profitability   [Jul-27-18 11:53AM  Motley Fool]
▶ [$$] Caution Still Needed on Biogen Alzheimers Bounty   [Jul-26-18 07:49PM  The Wall Street Journal]
▶ [$$] Caution Still Needed on Biogen Alzheimer's Bounty   [04:49PM  The Wall Street Journal]
▶ Why Biogen's Stock Is Slumping Today   [04:48PM  Motley Fool]
▶ [$$] Alzheimer's Drug Shows Benefit   [06:44PM  The Wall Street Journal]
▶ Company News For Jul 25, 2018   [10:49AM  Zacks]
▶ Biogen shares jump despite mixed news on rare disease drugs   [11:27AM  American City Business Journals]

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