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Biogen Inc. (BIIB) Down 1.4% Since Last Earnings Report: Can It Rebound?

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It has been about a month since the last earnings report for Biogen Inc. (BIIB - Free Report) . Shares have lost about 1.4% in that time frame, outperforming the S&P 500.

Will the recent negative trend continue leading up to its next earnings release, or is Biogen Inc. due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.

Biogen Q4 Earnings Miss, Revenues Surpass Estimates

Biogen reported fourth-quarter 2020 earnings per share of $4.58, which missed the Zacks Consensus Estimate of $4.93. Earnings declined 45.1% year over year due to lower revenues.

Sales came in at $2.85 billion, down 22% (both actual and constant currency) from the year-ago quarter, hurt by lower sales of Tecfidera and Spinraza. Sales, however, beat the Zacks Consensus Estimate of $2.82 billion.

Product sales in the quarter were $2.30 billion, down 21.2% year over year. Royalties on sales of Roche’s Ocrevus were $202.4 million in the quarter, down 1.5% year over year. Revenues from Biogen’s share of Rituxan and Gazyva declined 45.3% from the year-ago period to $216.5 million due to the impacts of COVID-19 and accelerating erosion from biosimilars. Other revenues also declined 9.3% in the quarter to $132.1 million.

Multiple Sclerosis Revenues

Biogen’s MS revenues were $1.81 billion in the reporter quarter, including Ocrevus royalties, which declined 24% year over year. MS revenues, excluding Ocrevus royalties, declined 8% year over year.

Tecfidera sales declined 47.6% to $607.9 million in the quarter, hurt by the launch of multiple generic products in the United States.

Vumerity, launched in the United States late in 2019, recorded $38.9 million in sales, higher than $15 million in the previous quarter. The launch uptake of the drug has been slow due to lower new patient starts and switches due to COVID-19 and reduced physician interaction. However, the company saw improvement in new prescription trends in the second half of 2020.

Total Fumarates (Tecfidera + Vumerity) revenues were $646.8 million in the quarter, down 44.6% year over year.  U.S. Fumarates sales in the quarter were $358.6 million, down 59.4% year over year. Ex-U.S. sales were $288.2 million, up 1.3% year over year.

Tysabri sales rose 0.5% year over year to $475.2 million. Tysabri’s U.S. sales rose 0.4% to $270.7 million in the quarter, while international revenues increased 0.5% to $204.5 million.

Combined interferon revenues (Avonex and Plegridy) in the quarter were $456 million, down 11.7% year over year. Avonex revenues declined 13.3% from the year-ago quarter to $356.4 million. Plegridy contributed $99.6 million to revenues, down 5.6% year over year.

Other Products

Sales of Spinraza declined 8.3% year over year to $498 million. Spinraza’s U.S. sales were $159.5 million in the quarter, down 34.3% year over year due to the negative impact of COVID-19 as well as increased competition in the United States. In ex-U.S. markets, Spinraza sales rose 12.7% year over year to $338.5 million as strong growth in emerging markets was partially offset by the maturation of larger European markets.

In 2021, Spinraza’s sales growth rate is expected to be hurt by a lower rate of new patient starts due to increased competition and the impact of loading dose dynamics as patients transition to dosing once every four months and the impact of COVID-19. Lower prices in some international markets may also hurt sales.

In the quarter, biosimilars revenues rose 1% year over year to $197 million. Though biosimilars revenues improved, sales continued to be impacted by pricing pressure, slowdown in new treatments and reduced clinic capacity for immunology patients as a result of COVID-19.

Benepali recorded sales of $117.6 million in the quarter, down 6.7% year over year. Flixabi sales of $26.1 million rose 43.4% year over year. Imraldi generated sales of $53.7 million in the quarter, up 3.8% year over year.

Research and development (R&D) expenses were $642 million, down 7% year over year. Selling, general and administrative (SG&A) expenses increased 20% year over year to $793 million.

In the quarter, Biogen repurchased approximately 1.6 million shares worth $400 million. Biogen had $4.6 billion remaining under its new share buyback plan of $5 billion as of Dec 31.

2020 Results

For 2020, Biogen generated revenues of $13.4 billion, reflecting 6.9% decline year over year.

For the same period, the company reported earnings of $33.70 per share, almost flat year over year.

2021 Guidance

The company expects total revenues in the range of $10.45-$10.75 billion in 2021. With multiple generic versions of Tecfidera now launched, the company expects significant erosion of the drug’s sales during the first half of 2021. The guidance also assumes significant erosion of Rituxan in the United States.

Earnings per share are expected between $17.00 and $18.50. Capital expenditures are anticipated between $375 million and $425 million.

Notably, the guidance assumes the approval of aducanumab in the United States by Jun 7, 2021. However, uncertainty looms large on the FDA’s final decision. Upon potential approval, the company is ready to launch the drug immediately. Though the company expects only modest revenues in 2021, the same might ramp up thereafter.

Adjusted R&D expenses are expected to be between $2.35 billion and $2.45 billion and adjusted SG&A costs are expected to be between $2.6 billion and $2.7 billion, which include $600 million associated with potential launch of aducanumab. Adjusted tax rate is expected to be between 16% and 17%.

The reduction in revenues from Tecfidera and Rituxan, both high margin products, is expected to put pressure on gross margins in 2021.

How Have Estimates Been Moving Since Then?

In the past month, investors have witnessed a downward trend in fresh estimates. The consensus estimate has shifted -18.17% due to these changes.

VGM Scores

Currently, Biogen Inc. has a poor Growth Score of F, a grade with the same score on the momentum front. However, the stock was allocated a grade of A on the value side, putting it in the top quintile for this investment strategy.

Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.


Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. It's no surprise Biogen Inc. has a Zacks Rank #4 (Sell). We expect a below average return from the stock in the next few months.

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