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Biogen Inc. (BIIB - Free Report) reported third-quarter 2018 earnings per share of $7.40, which beat the Zacks Consensus Estimate of $6.80. Earnings rose 17% year over year backed by higher revenues, and a lower tax rate and share count.
Sales came in at $3.44 billion, up 12% from the year-ago period. Moreover, sales beat the Zacks Consensus Estimate of $3.33 billion.
Revenue growth was principally driven by higher sales of Spinraza and higher contribution from biosimilars and Ocrevus royalties. Meanwhile, the MS franchise was stable from second-quarter levels.
Biogen’s shares have declined 1% this year so far compared with the industry’s decline of 14.8% in the same time frame.
Quarter in Detail
Biogen’s multiple sclerosis (MS) revenues were $2.31 billion in the reporter quarter including approximately $137 million in royalties on the sales of Roche’s (RHHBY - Free Report) MS drug, Ocrevus. MS revenues were flat year over year as well as sequentially. In the United States, MS sales are being hurt by the launch of Ocrevus. Though Ocrevus poses strong competition for Biogen’s MS drugs, Biogen receives royalties on U.S. sales of Ocrevus from Roche.
Tecfidera’s sales rose 2% year over year to $1.09 billion. This included U.S. sales of $842.1 million (up 0.7% year over year) and ex-U.S. sales of $247.9 million (up 6.3%). However, Tecfidera sales were flat sequentially.
Tysabri’s sales were flat year over year at $470 million. Tysabri U.S. sales declined 5.2% to $253.0 million in the quarter hurt by Ocrevus launch. International revenues rose 7.2% to $217.2 million. Tysabri’s sales rose 1% sequentially.
Combined interferon revenues (Avonex and Plegridy) in the third quarter were $590 million, down 11% year over year and 6% sequentially. Avonex revenues declined 10% from the year-ago period to $482 million. Plegridy contributed $108 million to revenues, which decreased 13% year over year.
U.S. Interferon revenues are experiencing declining trends due to patients transitioning to other oral or high efficacy MS therapies as well as due to higher discounts and allowance.
Zinbryta generated no revenues in the quarter as the drug was withdrawn from the market in March 2018 due to growing safety concerns and limited commercial adoption. The drug had contributed $14 million to total revenues in the year-ago quarter.
Sales of Spinraza, which is marketed for spinal muscular atrophy, grew 73% year over year and 11% sequentially to $468 million driven by sales growth in both the United States and in the ex-U.S. markets.
Spinraza U.S. sales were $223.9 million in the third quarter, up 8.7% sequentially driven by increased new patient demand among adults. In ex-U.S. markets, Spinraza sales rose 12.5% sequentially to $243.8 million driven by strong patient uptake and expansion into new regions.
The number of patients on Spinraza grew approximately 11% in the United States and 29% outside the United States in the quarter compared with the end of the second quarter.
In the third quarter of 2018, Biogen recorded biosimilar revenues of $135 million, up 33% year over year and 6% sequentially. Biogen markets two biosimilar products — Flixabi (a biosimilar referencing J&J (JNJ - Free Report) /Merck’s Remicade) and Benepali (a biosimilar referencing Amgen/Pfizer’s Enbrel). In October, Biogen launched Imraldi, a biosimilar version of AbbVie’s (ABBV - Free Report) Humira in the EU.
Revenues from Anti-CD20 therapeutic programs, which include Biogen’s share of Rituxan and Gazyva operating profits and Ocrevus royalties, increased almost 29% from the year-ago period to $511.7 million.
Research and development (R&D) spend increased 14% year over year to $508 million. Selling, general and administrative (SG&A) spend was up 14% year over year to $495 million. However, both SG&A and R&D costs declined sequentially in the third quarter.
Pipeline Update
Biogen and partner UCB announced top-line data from a phase IIb study evaluating their pipeline candidate dapirolizumab pegol (DZP) for the treatment of moderately-to-severely active systemic lupus erythematosus (SLE) in patients who are already receiving standard-of-care treatment. The study failed to meet the primary endpoint of showing a dose response at 24 weeks on the BILAG-Based Composite Lupus Assessment (BICLA) composite index. The companies said they will continue to evaluate the data while assessing the next step.
Our Take
Biogen beat estimates for both earnings and sales in the third quarter fueled mainly by strong performance of its newest drug, Spinraza, which we believe has multi-billion dollar potential. We like Biogen’s efforts to diversify beyond MS to other areas like Alzheimer’s, Parkinson's and stroke, among others and its efforts to regularly in-license assets to build its pipeline. Several of these assets have transformative potential. However, the launch of Ocrevus by Roche is having a negative impact on MS franchise sales in the United States, which is a concern.
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And this outperformance has not just been a recent phenomenon. Over the years it has been remarkably consistent. From 2000 - 2017, the composite yearly average gain for these strategies has beaten the market more than 19X over. Maybe even more remarkable is the fact that we're willing to share their latest stocks with you without cost or obligation.
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Biogen (BIIB) Q3 Earnings & Sales Beat, Spinraza Shines
Biogen Inc. (BIIB - Free Report) reported third-quarter 2018 earnings per share of $7.40, which beat the Zacks Consensus Estimate of $6.80. Earnings rose 17% year over year backed by higher revenues, and a lower tax rate and share count.
Sales came in at $3.44 billion, up 12% from the year-ago period. Moreover, sales beat the Zacks Consensus Estimate of $3.33 billion.
Revenue growth was principally driven by higher sales of Spinraza and higher contribution from biosimilars and Ocrevus royalties. Meanwhile, the MS franchise was stable from second-quarter levels.
Biogen’s shares have declined 1% this year so far compared with the industry’s decline of 14.8% in the same time frame.
Quarter in Detail
Biogen’s multiple sclerosis (MS) revenues were $2.31 billion in the reporter quarter including approximately $137 million in royalties on the sales of Roche’s (RHHBY - Free Report) MS drug, Ocrevus. MS revenues were flat year over year as well as sequentially. In the United States, MS sales are being hurt by the launch of Ocrevus. Though Ocrevus poses strong competition for Biogen’s MS drugs, Biogen receives royalties on U.S. sales of Ocrevus from Roche.
Tecfidera’s sales rose 2% year over year to $1.09 billion. This included U.S. sales of $842.1 million (up 0.7% year over year) and ex-U.S. sales of $247.9 million (up 6.3%). However, Tecfidera sales were flat sequentially.
Tysabri’s sales were flat year over year at $470 million. Tysabri U.S. sales declined 5.2% to $253.0 million in the quarter hurt by Ocrevus launch. International revenues rose 7.2% to $217.2 million. Tysabri’s sales rose 1% sequentially.
Combined interferon revenues (Avonex and Plegridy) in the third quarter were $590 million, down 11% year over year and 6% sequentially. Avonex revenues declined 10% from the year-ago period to $482 million. Plegridy contributed $108 million to revenues, which decreased 13% year over year.
U.S. Interferon revenues are experiencing declining trends due to patients transitioning to other oral or high efficacy MS therapies as well as due to higher discounts and allowance.
Zinbryta generated no revenues in the quarter as the drug was withdrawn from the market in March 2018 due to growing safety concerns and limited commercial adoption. The drug had contributed $14 million to total revenues in the year-ago quarter.
Sales of Spinraza, which is marketed for spinal muscular atrophy, grew 73% year over year and 11% sequentially to $468 million driven by sales growth in both the United States and in the ex-U.S. markets.
Spinraza U.S. sales were $223.9 million in the third quarter, up 8.7% sequentially driven by increased new patient demand among adults. In ex-U.S. markets, Spinraza sales rose 12.5% sequentially to $243.8 million driven by strong patient uptake and expansion into new regions.
The number of patients on Spinraza grew approximately 11% in the United States and 29% outside the United States in the quarter compared with the end of the second quarter.
In the third quarter of 2018, Biogen recorded biosimilar revenues of $135 million, up 33% year over year and 6% sequentially. Biogen markets two biosimilar products — Flixabi (a biosimilar referencing J&J (JNJ - Free Report) /Merck’s Remicade) and Benepali (a biosimilar referencing Amgen/Pfizer’s Enbrel). In October, Biogen launched Imraldi, a biosimilar version of AbbVie’s (ABBV - Free Report) Humira in the EU.
Revenues from Anti-CD20 therapeutic programs, which include Biogen’s share of Rituxan and Gazyva operating profits and Ocrevus royalties, increased almost 29% from the year-ago period to $511.7 million.
Research and development (R&D) spend increased 14% year over year to $508 million. Selling, general and administrative (SG&A) spend was up 14% year over year to $495 million. However, both SG&A and R&D costs declined sequentially in the third quarter.
Pipeline Update
Biogen and partner UCB announced top-line data from a phase IIb study evaluating their pipeline candidate dapirolizumab pegol (DZP) for the treatment of moderately-to-severely active systemic lupus erythematosus (SLE) in patients who are already receiving standard-of-care treatment. The study failed to meet the primary endpoint of showing a dose response at 24 weeks on the BILAG-Based Composite Lupus Assessment (BICLA) composite index. The companies said they will continue to evaluate the data while assessing the next step.
Our Take
Biogen beat estimates for both earnings and sales in the third quarter fueled mainly by strong performance of its newest drug, Spinraza, which we believe has multi-billion dollar potential. We like Biogen’s efforts to diversify beyond MS to other areas like Alzheimer’s, Parkinson's and stroke, among others and its efforts to regularly in-license assets to build its pipeline. Several of these assets have transformative potential. However, the launch of Ocrevus by Roche is having a negative impact on MS franchise sales in the United States, which is a concern.
Biogen currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Biogen Inc. Price, Consensus and EPS Surprise
Biogen Inc. Price, Consensus and EPS Surprise | Biogen Inc. Quote
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And this outperformance has not just been a recent phenomenon. Over the years it has been remarkably consistent. From 2000 - 2017, the composite yearly average gain for these strategies has beaten the market more than 19X over. Maybe even more remarkable is the fact that we're willing to share their latest stocks with you without cost or obligation.
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