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Biogen (BIIB) Q3 Earnings: Will it Deliver a Beat Again?
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We expect Biogen Inc. (BIIB - Free Report) , a well-known name in the multiple sclerosis (MS) market, to beat expectations when it reports third-quarter 2017 results on Oct 24, before the market opens. Last quarter, the company delivered a positive earnings surprise of 15.60%.
Biogen’s shares have risen 21.4% this year, better than the industry’s growth of 12.4% in the same time frame.
Biogen’s earnings performance has been pretty impressive so far, having delivered a positive surprise in each of the last four quarters. The average earnings beat over the last four quarters is 6.41%.
Let’s see how things are shaping up for this announcement.
Factors to Consider
Global patient growth is driving prescription trends and sales of Biogen’s MS drugs. We expect the trend to continue in the third quarter. However, rising competition from Roche’s (RHHBY - Free Report) newly launched MS drug Ocrevus may hurt sales of Tysabri modestly as in the second quarter. The Zacks Consensus estimate for key MS drugs, Tysabri and Tecfidera are $479 million and $1.08 billion, respectively.
Meanwhile, the combined number of patients using Avonex and Plegridy will continue to decline with patients transitioning to other oral MS therapies as well as due to higher discounts and allowance.
Spinraza, approved for spinal muscular atrophy in December 2016, witnessed faster-than-anticipated adoption in the United States in the first half backed by robust underlying demand. In June/July, Spinraza was approved in the EU, Canada and Japan, which should boost sales in Q3. However, at the Q2 call, management had mentioned that Spinraza U.S. sales may slow in the second half, as more difficult-to-treat patients are coming on and patient transition from intensive Spinraza treatment during induction to a less intensive maintenance schedule.
Biogen’s biosimilar products — Flixabi (a biosimilar referencing Remicade) and Benepali (a biosimilar referencing Enbrel) — are also generating higher revenues. The trend should continue this quarter as well.
Headcount reduction and restructuring initiatives are expected to continue to lower operating expenses. Meanwhile, R&D expenses are expected to increase due to increased business development payments.
Investor focus will remain on Tecfidera’s scrip trends, sales rampup of Spinraza, pipeline progress and acquisition plans.
Earnings Whispers
Our proven model shows that Biogen is likely to beat estimates because it has the right combination of two key ingredients. A stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for a likely positive surprise and Biogen has the right mix.
Zacks ESP: Earnings ESP, which represents the difference between the Most Accurate estimate ($5.72 per share) and the Zacks Consensus Estimate ($5.68 per share), is +0.71%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: Biogen has a Zacks Rank #3. The combination of Biogen’s Zacks Rank #3 and positive ESP makes us confident of an earnings beat in the upcoming release.
Sell-rated stocks (Zacks Rank #4 or 5), on the other hand, should never be considered going into an earnings announcement, especially when the company is seeing negative estimate revisions.
Pfizer, Inc. (PFE - Free Report) with an Earnings ESP of +1.85% and a Zacks Rank #3. The company is scheduled to release results on Oct 31.
The Hottest Tech Mega-Trend of All
Last year, it generated $8 billion in global revenues. By 2020, it's predicted to blast through the roof to $47 billion. Famed investor Mark Cuban says it will produce ""the world's first trillionaires,"" but that should still leave plenty of money for regular investors who make the right trades early.
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Biogen (BIIB) Q3 Earnings: Will it Deliver a Beat Again?
We expect Biogen Inc. (BIIB - Free Report) , a well-known name in the multiple sclerosis (MS) market, to beat expectations when it reports third-quarter 2017 results on Oct 24, before the market opens. Last quarter, the company delivered a positive earnings surprise of 15.60%.
Biogen’s shares have risen 21.4% this year, better than the industry’s growth of 12.4% in the same time frame.
Biogen’s earnings performance has been pretty impressive so far, having delivered a positive surprise in each of the last four quarters. The average earnings beat over the last four quarters is 6.41%.
Let’s see how things are shaping up for this announcement.
Factors to Consider
Global patient growth is driving prescription trends and sales of Biogen’s MS drugs. We expect the trend to continue in the third quarter. However, rising competition from Roche’s (RHHBY - Free Report) newly launched MS drug Ocrevus may hurt sales of Tysabri modestly as in the second quarter. The Zacks Consensus estimate for key MS drugs, Tysabri and Tecfidera are $479 million and $1.08 billion, respectively.
Meanwhile, the combined number of patients using Avonex and Plegridy will continue to decline with patients transitioning to other oral MS therapies as well as due to higher discounts and allowance.
Spinraza, approved for spinal muscular atrophy in December 2016, witnessed faster-than-anticipated adoption in the United States in the first half backed by robust underlying demand. In June/July, Spinraza was approved in the EU, Canada and Japan, which should boost sales in Q3. However, at the Q2 call, management had mentioned that Spinraza U.S. sales may slow in the second half, as more difficult-to-treat patients are coming on and patient transition from intensive Spinraza treatment during induction to a less intensive maintenance schedule.
Biogen’s biosimilar products — Flixabi (a biosimilar referencing Remicade) and Benepali (a biosimilar referencing Enbrel) — are also generating higher revenues. The trend should continue this quarter as well.
Headcount reduction and restructuring initiatives are expected to continue to lower operating expenses. Meanwhile, R&D expenses are expected to increase due to increased business development payments.
Investor focus will remain on Tecfidera’s scrip trends, sales rampup of Spinraza, pipeline progress and acquisition plans.
Earnings Whispers
Our proven model shows that Biogen is likely to beat estimates because it has the right combination of two key ingredients. A stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for a likely positive surprise and Biogen has the right mix.
Zacks ESP: Earnings ESP, which represents the difference between the Most Accurate estimate ($5.72 per share) and the Zacks Consensus Estimate ($5.68 per share), is +0.71%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: Biogen has a Zacks Rank #3. The combination of Biogen’s Zacks Rank #3 and positive ESP makes us confident of an earnings beat in the upcoming release.
Sell-rated stocks (Zacks Rank #4 or 5), on the other hand, should never be considered going into an earnings announcement, especially when the company is seeing negative estimate revisions.
Biogen Inc. Price and EPS Surprise
Biogen Inc. Price and EPS Surprise | Biogen Inc. Quote
Other Stocks to Consider
Some other stocks in the biotech/pharmaceuticals sector that have both a positive ESP and a favorable Zacks Rank include
Bristol-Myers Squibb Company (BMY - Free Report) , scheduled to release results on Oct 26, with an Earnings ESP of +2.35% and a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.
Pfizer, Inc. (PFE - Free Report) with an Earnings ESP of +1.85% and a Zacks Rank #3. The company is scheduled to release results on Oct 31.
The Hottest Tech Mega-Trend of All
Last year, it generated $8 billion in global revenues. By 2020, it's predicted to blast through the roof to $47 billion. Famed investor Mark Cuban says it will produce ""the world's first trillionaires,"" but that should still leave plenty of money for regular investors who make the right trades early.
See Zacks' 3 Best Stocks to Play This Trend >>