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Biogen Inc. (BIIB) Up 4.7% Since Last Earnings Report: Can It Continue?

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A month has gone by since the last earnings report for Biogen Inc. (BIIB - Free Report) . Shares have added about 4.7% in that time frame, outperforming the S&P 500.

Will the recent positive trend continue leading up to its next earnings release, or is Biogen Inc. due for a pullback? 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 catalysts.

Q1 Earnings & Sales Beat

Biogen reported first-quarter 2023 adjusted earnings per share (EPS) of $3.40, which beat the Zacks Consensus Estimate of $3.25 and our model estimate of $3.33. Earnings declined 6% year over year due to lower revenues. On a constant currency basis, earnings were flat.

Sales came in at $2.46 billion, down 3% on a reported basis (flat on a constant-currency basis) from the year-ago quarter, hurt by lower sales of multiple sclerosis (MS) drugs like Tecfidera and Vumerity. Sales beat the Zacks Consensus Estimate as well as our estimate of $2.34 billion.

Product sales in the quarter were $1.76 billion, down 14.3% year over year. Revenues from anti-CD20 therapeutic programs were flat at $399.5 million. The revenues include royalties on sales of Roche’s Ocrevus and Biogen’s share of Roche’s drugs, Rituxan and Gazyva. Revenues from Ocrevus royalties increased 12.5%, partially offset by a 25% decline in revenues from profit share on Rituxan due to biosimilar competition. Contract manufacturing and royalty revenues rose 383% in the quarter to $319.0 million.

Multiple Sclerosis Revenues

Biogen’s MS revenues were $1.13 billion in the reporter quarter, down 19% on a reported basis and 17% on a constant currency basis year over year.

The first quarter is typically a seasonally weaker quarter for Biogen’s MS business in the United States due to higher discounts and allowances and some channel dynamics.

Tecfidera sales declined 33% to $274.5 million as multiple generic versions of the drug have been launched in the United States and new generic launches are ongoing in several EU countries. Tecfidera sales were better than our model estimate of $234.0 million as well as the Zacks Consensus Estimate of $271 million.

In the first quarter, Biogen secured a favorable decision from the Court of Justice of the European Union related to Tecfidera regulatory data and marketing protection. The favorable decision from the court provides Biogen marketing protection until at least February of 2024 if the company enforces that protection. Separately, Biogen is also continuing to enforce its 2028 patent for Tecfidera in the EU.

Vumerity recorded $108.2 million in sales, down 15.5% due to pricing pressure and a contraction of the oral segment of the market in the United States. Vumerity sales were lower than the Zacks Consensus Estimate of $152 million.

Regarding Vumerity supply constraints, Biogen believes it has resolved previously reported manufacturing issues at its contract manufacturer and does not expect any supply shortage in 2023.

Total Fumarates (Tecfidera + Vumerity) revenues were $382.7 million in the quarter, down 28.9% year over year.

Tysabri sales declined 9.2% year over year to $472.8 million, which missed the Zacks Consensus Estimate of $494 million. Tysabri sales were hurt by pricing pressure, competition and channel dynamics.

Combined interferon revenues (Avonex and Plegridy) in the quarter were $245.6 million, down 20.7%, hurt by a continued shift from the injectable platform to oral or high-efficacy therapies.

In 2023, MS revenues are expected to decline as a result of increasing competition for many of MS products. A potential biosimilar of Tysabri may be launched in the United States and European markets in 2023.

In the rest of the year, Biogen expects to see a slower rate of decline on a year-over-year basis than first- quarter levels.

Other Products

Sales of Spinraza declined 6% on a reported basis and 2% on a constant currency basis to $443.0 million. Spinraza sales were better than the Zacks Consensus Estimate of $428 million while being in-line with our model estimate of $443 million.

Spinraza’s U.S. sales declined 10.2% year over year due to fewer new patient starts and some channel dynamics as compared to the first quarter of last year. However, the signs of stabilization in patient base seen in the previous quarter continue.

In ex-U.S. markets, Spinraza sales declined 4% at actual currency. However, on a constant currency basis, sales rose 2% due to the favorable timing of shipments and higher sales volume growth in certain Asian markets, which were offset by increased competitive pressure in certain established markets, particularly Germany.

In the quarter, biosimilars revenues decreased 1% year over year to $192 million. However, on a constant currency basis, biosimilars revenues rose 4%. While pricing pressure continued to hurt sales of
anti-TNF biosimilar products in Europe, the launch of Byooviz benefited sales.
Biosimilars revenues are expected to be modest in 2023 as the continued launch of Byooviz is expected to make up for pricing pressure in certain markets.

Biogen recorded ($18.0) million of Alzheimer’s disease revenues, which included product revenues from Alzheimer’s drug, Aduhelm and revenues from Leqembi collaboration. Beginning in the first quarter of 2023, Biogen recorded 50% share of net commercial profits and losses for Leqembi in the United States (includes in-market revenue less cost of sales, royalties, and SG&A expenses) as a component of total revenues. In the first quarter, the reimbursement to Eisai for Biogen’s share of U.S. Leqembi SG&A expense is reflected as a component of revenues rather than SG&A.

In 2023, Biogen expects to continue to recognize a reduction to Alzheimer’s revenues, with commercial expense exceeding initial revenues.

Research and development expenses were $571.0 million, up 3% year over year. Adjusted selling, general and administrative expenses declined 5% year over year to $603.0 million, driven by the company’s cost savings initiatives.

No shares were repurchased in the first quarter of 2023. Biogen had $2.05 billion remaining under its share buyback plan of $5 billion, which was authorized in October 2020.

2023 Guidance Issued

The company maintained its previously issued earnings and sales guidance for 2023.

Total revenues are expected to decline at a mid-single-digit percentage in 2023 from the 2022 level.

Adjusted earnings are expected in the range of $15.00 to $16.00 per share.

Overall, operating expenses are expected to be lower in the second half of 2023 than in the first half due to investments to support potential news launches (Leqembi and zuranolone).

Pipeline Updates

Biogen said it is deprioritizing pipeline candidates across stroke, gene therapy and ophthalmology as part of ongoing R&D pipeline optimization.

Biogen announced that it is terminating its involvement in the development of BIIB093 due to operational challenges to help save costs. BIIB093 was being developed in a phase III study for large hemispheric infarction and a phase II study for brain contusion. Biogen has sent a letter of termination to Remedy Pharmaceuticals, which had originally developed the candidate and now has the option to resume development of both programs.

Biogen also announced that it is pausing the initiation of a phase IIb study for BIIB131 for acute ischemic stroke while it works out whether to begin the study. Biogen also said it is discontinuing development of BIIB132 in spinocerebellar ataxia type 3.

Biogen said it could migrate to immunology and stregthen presence in rare disease franchise with tofersen and in neuropsychiatry with zuranolone.

How Have Estimates Been Moving Since Then?

In the past month, investors have witnessed a downward trend in estimates revision.

VGM Scores

Currently, Biogen Inc. has a poor Growth Score of F, however its Momentum Score is doing a bit better with a D. However, the stock was allocated a grade of B on the value side, putting it in the second quintile for this investment strategy.

Overall, the stock has an aggregate VGM Score of D. 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. Notably, Biogen Inc. has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.

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