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Biogen (BIIB) Q4 Earnings & Sales Miss Estimates, Stock Falls

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Biogen (BIIB - Free Report) reported fourth-quarter 2023 adjusted earnings per share (EPS) of $2.95, which missed the Zacks Consensus Estimate of $3.16. Earnings declined 27% year over year. On a constant currency basis, earnings were flat.

Total revenues came in at $2.39 billion, down 6% on a reported basis (5% on a constant-currency basis) from the year-ago quarter due to lower sales of all key drugs, multiple sclerosis (MS) drugs like Tecfidera and Tysabri as well as spinal muscular atrophy drug, Spinraza. Sales missed the Zacks Consensus Estimate of $2.45 billion.

Product sales in the quarter were $1.83 billion, down 4% year over year. Revenues from anti-CD20 therapeutic programs declined 3% to $435.8 million. The revenues include royalties on sales of Roche’s (RHHBY - Free Report) Ocrevus and Biogen’s share of Roche’s drugs, Rituxan, Gazyva and Lunsumio.

Contract manufacturing and royalty revenues declined 38% in the quarter to $118.1 million. Contract manufacturing and royalty revenues include Biogen’s 50% share of revenues (including royalties) from the Leqembi collaboration with Eisai and revenues from the manufacturing of Leqembi. Eisai recorded $7 million in sales from Leqembi in the fourth quarter compared with $2 million in the third quarter.

Leqembi gained full approval from the FDA for early Alzheimer’s disease in the United States and broad reimbursement from the Centers for Medicare & Medicaid Services (CMS) in July 2023. Regulatory applications seeking approval of Leqembi are under review in Europe. Leqembi is approved in China and Japan.

Multiple Sclerosis Revenues

Biogen’s MS revenues were $1.17 billion in the reporter quarter, down 8% on a reported basis and 6% on a constant currency basis year over year due to generic competition for Tecfidera and rising competitive pressure in the MS market.

Tecfidera sales declined 17.8% to $244.3 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 missed the Zacks Consensus Estimate of $247 million but beat our model estimate of $214.8 million.

Vumerity recorded $156.4 million in sales, up 3.7%. Vumerity sales missed the Zacks Consensus Estimate of $174.0 million and our model estimate of $171.8 million.

Tysabri sales declined 4.9% year over year to $464.7 million, hurt by increased competition and higher discounts. Tysabri's sales beat the Zacks Consensus Estimate of $444 million and our estimate of $448 million.

Combined interferon revenues (Avonex and Plegridy) in the quarter were $280.0 million, down 9.6%, hurt by a continued shift from the injectable platform to oral or high-efficacy therapies.

Rare Disease Drugs

Sales of Spinraza declined 10% to $412.6 million. Spinraza sales missed the Zacks Consensus Estimate of 447 million and our estimate of $459.5 million.

Rare disease drug Skyclarys, which was added with the September 2023 acquisition of Reata Pharmaceuticals, generated sales of $55.9 million in the fourth quarter. Skyclarys is the only drug approved for the treatment of Friedreich’s ataxia. Earlier this week, Skyclarys was approved by the European Commission.

Qalsody, which was launched for amyotrophic lateral sclerosis (ALS) in the second quarter of 2023, recorded sales of $3.3 million in the fourth quarter.

Other Products

In the quarter, biosimilar revenues rose 7.7% to $188.2 million.

In the quarter, the collaboration profit-sharing was a net expense of $54 million, which included $53 million of net profit-sharing expense related to Biogen’s biosimilar collaboration with Samsung Bioepis and approximately $1 million of net profit-sharing expense related to Biogen’s collaboration with Sage Therapeutics (SAGE - Free Report) related to the commercialization of Zurzuvae in the United States.

Zurzuvae (zuranolone) was approved for postpartum depression in August and launched in mid-December 2023. Biogen and Sage equally share profits and losses for the commercialization of Zurzuvae in the United States, while, outside U.S. markets, Biogen records product sales (excluding Japan, Taiwan, and South Korea) and pays royalties to Sage. Zurzuvae has not yet been approved in the EU.

Costs Decline

Research and development expenses were $568.0 million, down 6% year over year. Adjusted selling, general and administrative expenses declined 7% year over year to $588.0 million, driven by the company’s cost-saving initiatives.

2023 Results

For 2023, Biogen generated revenues of $9.84 billion, which missed the Zacks Consensus Estimate of $9.93 billion. Revenues declined 3% year over year on a reported basis, in line with the guidance of a decline in a low-single-digit percentage

Earnings were $14.72 a share, down 17% year over year. Earnings missed the Zacks Consensus Estimate of $14.97 but were within the guidance range of $14.50 to $15.00

2024 Guidance

Total revenues are expected to decline by a low- to mid-single-digit percentage in 2024 from the 2023 level. Core pharmaceutical revenues, comprising product sales plus Leqembi revenues, are expected to be flat in 2024 compared to 2023 levels.

Adjusted earnings are expected in the range of $15.00 to $16.00, implying growth of approximately 5% at the midpoint. The Zacks Consensus Estimate is pegged at $14.97 per share.

Operating income is expected to grow at a low-double-digit percentage in 2024, driven by lower cost of sales and lower operating costs due to the cost-saving initiatives.

Our Take

Biogen’s fourth-quarter results were weak as it missed estimates on both counts. Earnings were hurt by a 35-cent closeout cost for Biogen’s controversial Alzheimer’s drug, Aduhelm, and lower revenues. Earlier this month, Biogen announced that it is ceasing the development and commercialization of Aduhelm, which was approved by the FDA on an accelerated basis in June 2021. Instead, it will advance the launch of a new Alzheimer's drug, Leqembi, and accelerate the development of new treatment modalities for Alzheimer’s disease.

Sales of all important medicines, Tecfidera, Tysabri & Spinraza, declined in the quarter.

Biogen’s shares were down 5% in pre-market trading due to the fourth-quarter earnings and sales miss.

Biogen’s stock has declined 15.8% in the past year compared with a decline of 12.2% for the industry.


Zacks Investment Research
Image Source: Zacks Investment Research


Most of Biogen’s key drugs are facing declining sales due to intense competitive pressure. However, Biogen’s new products, such as Leqembi for Alzheimer’s disease, Skyclarys for Friedreich’s ataxia and Zurzuvae for depression, could help revive growth. However, at present, Biogen and partner Eisai are facing continued challenges with Leqembi’s launch. We believe it will take time for some meaningful improvement in Leqembi sales. Other new drugs, Zurzuvae and Qalsody are also not yet generating enough sales to make up for the declining MS revenues.

Biogen believes Leqembi has the potential to generate blockbuster sales following its traditional approval and broader CMS coverage in the United States. Biogen expects sales of Leqembi to start growing from 2024.

Zacks Rank & Stock to Consider

Biogen currently has a Zacks Rank #3 (Hold).

Biogen Inc. Price and Consensus

Biogen Inc. Price and Consensus

Biogen Inc. price-consensus-chart | Biogen Inc. Quote


A better-ranked biotech stock is Puma Biotechnology (PBYI - Free Report) , with a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

In the past 60 days, estimates for Puma Biotechnology’s 2024 earnings per share have improved from 64 cents to 69 cents. In the past year, shares of PBYI have risen 46.5%.

Earnings of Puma Biotechnology beat estimates in three of the last four quarters while missing the same once. PBYI delivered a four-quarter average earnings surprise of 76.55%.

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