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What's in Store for Biogen (BIIB) This Earnings Season?
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Biogen Inc. (BIIB - Free Report) , a well-known name in the multiple sclerosis (MS) market, will report first-quarter 2018 results on Apr 24, before the market opens. Last quarter, the company delivered a negative earnings surprise of 3.31%.
Biogen’s shares have declined 16.5% this year, underperforming the industry’s decline of 8.4% in the same time frame.
Biogen’s earnings performance has been decent so far, having delivered a positive surprise in three of the last four quarters. The average earnings beat over the last four quarters is 6.91%.
Let’s see how things are shaping up for this announcement
Factors to Consider
In the fourth quarter of 2017, Biogen witnessed higher sales of its multiple sclerosis drugs. Patient growth across major European markets and strong emerging market growth drove international Tecfidera sales while a $20 million inventory build in the quarter benefited U.S. sales. However, on the call, Biogen mentioned that seasonality and absence of inventory build (that benefitted fourth quarter 2017 results) will hurt the performance of its MS franchise in the first quarter.
Continued competitive pressure, especially from Roche’s (RHHBY - Free Report) newly launched MS drug, Ocrevus will hurt the performance of Biogen’s MS franchise, particularly sales of Tysabri. The Zacks Consensus Estimate for sales of Tecfidera for the first quarter is pegged at $1.02 billion while that for Tysabri (Global In-Market sales) is $462 million.
On the fourth-quarter conference call, Biogen said that since Ocrevus launch, it has witnessed a decrease in the number of patient starts and an increase in discontinuation of Tysabri in the United States. The negative trend may continue this quarter.
The combined number of patients using Avonex and Plegridy are expected to decline with patients transitioning to other oral MS therapies as well as due to higher discounts and allowance.
Zinbryta is unlikely to have made any significant contribution to revenues in the quarter. In March, Biogen and partner AbbVie announced their decision to withdraw Zinbryta from the markets, less than two years of its approval, due to growing safety concerns and limited commercial adoption of the drug due to its restrictive label. Both companies decided to discontinue marketing of the drug on grounds of the complex and evolving benefit/risk profile of Zinbryta. An update is expected on the first-quarter conference call.
Biogen’s newly launched drug Spinraza approved for spinal muscular atrophy is likely to see strong demand trends, particularly in international markets. On the fourth-quarter conference call, Biogen management had said that in 2018, a significant portion of Spinraza’s revenue growth is expected to come from outside the United States.
Biogen’s biosimilar products - Flixabi (a biosimilar referencing Remicade) and Benepali (a biosimilar referencing Enbrel) are also generating significant revenues. The trend should continue this quarter as well.
On the fourth-quarter call, the company had also said that operating expenses are expected to be sequentially lower in the first quarter. However, earnings growth is expected to be higher in the second and fourth quarters of the year
Earnings Whispers
Our proven model does not conclusively show that Biogen is likely to beat on earnings this quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. That is not the case here, as you will see below.
Zacks ESP: Its Earnings ESP is -0.51% as the Most Accurate estimate stands at $5.90 while the Zacks Consensus Estimate is pegged higher at $5.93. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: Biogen’s Zacks Rank #3 increases the predictive power of ESP. However, we need to have a positive ESP to be confident about an earnings beat.
We caution against Sell-rated stocks (Zacks Rank #4 or 5) going into the earnings announcement, especially when the company is seeing negative estimate revisions.
Stocks to Consider
Biotech stocks that have both a positive ESP and a favorable Zacks Rank include:
Amgen, Inc. (AMGN - Free Report) has an Earnings ESP of +3.34% and a Zacks Rank #3. The company is scheduled to release results on Apr 24.
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Zacks EVP Kevin Matras believes this familiar stock has only just begun its climb to become one of the greatest investments of all time. It’s a once-in-a-generation opportunity to invest in pure genius.
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What's in Store for Biogen (BIIB) This Earnings Season?
Biogen Inc. (BIIB - Free Report) , a well-known name in the multiple sclerosis (MS) market, will report first-quarter 2018 results on Apr 24, before the market opens. Last quarter, the company delivered a negative earnings surprise of 3.31%.
Biogen’s shares have declined 16.5% this year, underperforming the industry’s decline of 8.4% in the same time frame.
Biogen’s earnings performance has been decent so far, having delivered a positive surprise in three of the last four quarters. The average earnings beat over the last four quarters is 6.91%.
Biogen Inc. Price and EPS Surprise
Biogen Inc. Price and EPS Surprise | Biogen Inc. Quote
Let’s see how things are shaping up for this announcement
Factors to Consider
In the fourth quarter of 2017, Biogen witnessed higher sales of its multiple sclerosis drugs. Patient growth across major European markets and strong emerging market growth drove international Tecfidera sales while a $20 million inventory build in the quarter benefited U.S. sales. However, on the call, Biogen mentioned that seasonality and absence of inventory build (that benefitted fourth quarter 2017 results) will hurt the performance of its MS franchise in the first quarter.
Continued competitive pressure, especially from Roche’s (RHHBY - Free Report) newly launched MS drug, Ocrevus will hurt the performance of Biogen’s MS franchise, particularly sales of Tysabri. The Zacks Consensus Estimate for sales of Tecfidera for the first quarter is pegged at $1.02 billion while that for Tysabri (Global In-Market sales) is $462 million.
On the fourth-quarter conference call, Biogen said that since Ocrevus launch, it has witnessed a decrease in the number of patient starts and an increase in discontinuation of Tysabri in the United States. The negative trend may continue this quarter.
The combined number of patients using Avonex and Plegridy are expected to decline with patients transitioning to other oral MS therapies as well as due to higher discounts and allowance.
Zinbryta is unlikely to have made any significant contribution to revenues in the quarter. In March, Biogen and partner AbbVie announced their decision to withdraw Zinbryta from the markets, less than two years of its approval, due to growing safety concerns and limited commercial adoption of the drug due to its restrictive label. Both companies decided to discontinue marketing of the drug on grounds of the complex and evolving benefit/risk profile of Zinbryta. An update is expected on the first-quarter conference call.
Biogen’s newly launched drug Spinraza approved for spinal muscular atrophy is likely to see strong demand trends, particularly in international markets. On the fourth-quarter conference call, Biogen management had said that in 2018, a significant portion of Spinraza’s revenue growth is expected to come from outside the United States.
Biogen’s biosimilar products - Flixabi (a biosimilar referencing Remicade) and Benepali (a biosimilar referencing Enbrel) are also generating significant revenues. The trend should continue this quarter as well.
On the fourth-quarter call, the company had also said that operating expenses are expected to be sequentially lower in the first quarter. However, earnings growth is expected to be higher in the second and fourth quarters of the year
Earnings Whispers
Our proven model does not conclusively show that Biogen is likely to beat on earnings this quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. That is not the case here, as you will see below.
Zacks ESP: Its Earnings ESP is -0.51% as the Most Accurate estimate stands at $5.90 while the Zacks Consensus Estimate is pegged higher at $5.93. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: Biogen’s Zacks Rank #3 increases the predictive power of ESP. However, we need to have a positive ESP to be confident about an earnings beat.
We caution against Sell-rated stocks (Zacks Rank #4 or 5) going into the earnings announcement, especially when the company is seeing negative estimate revisions.
Stocks to Consider
Biotech stocks that have both a positive ESP and a favorable Zacks Rank include:
Alexion Pharmaceuticals, Inc. , scheduled to release results on Apr 26, has an Earnings ESP of +2.09% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.
Amgen, Inc. (AMGN - Free Report) has an Earnings ESP of +3.34% and a Zacks Rank #3. The company is scheduled to release results on Apr 24.
Wall Street’s Next Amazon
Zacks EVP Kevin Matras believes this familiar stock has only just begun its climb to become one of the greatest investments of all time. It’s a once-in-a-generation opportunity to invest in pure genius.
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