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Biogen (BIIB) Q4 Earnings Beat Estimates, Revenues Up Y/Y

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Biogen Inc. (BIIB - Free Report) reported fourth-quarter 2018 earnings per share of $6.99, which beat the Zacks Consensus Estimate of $6.72. Earnings rose 32.9% year over year, backed by higher revenues.

Sales came in at $3.53 billion, up 7% from the year-ago quarter. Moreover, sales beat the Zacks Consensus Estimate of $3.39 billion.

Revenue growth was principally driven by higher sales of Spinraza, and higher contributions from biosimilars and Ocrevus royalties. Tecfidera sales also increased during the quarter.

Biogen’s shares have decreased 8.9% in the past year compared with the industry’s decline of 24.6%.

 

Quarter in Detail

Biogen’s multiple sclerosis (MS) revenues were $2.30 billion in the reporter quarter, including approximately $152 million in royalties on the sales of Roche’s (RHHBY - Free Report) MS drug, Ocrevus. MS revenues grew 2% year over year.

In the United States, MS sales are dented by the launch of Ocrevus. Though Ocrevus poses strong competition to Biogen’s MS drugs, the company receives royalties on U.S. sales of Ocrevus from Roche.

Tecfidera sales rose 3% year over year and 2% sequentially to $1.10 billion. This included U.S. sales of $856.30 million (up 3% year over year) and ex-U.S. sales of $254.10 million (up 4.1%).

Tysabri sales were flat year over year at $464 million. Tysabri U.S. sales rose 1.9% to $256.80 million in the quarter. International revenues declined 1.4% to $207.60 million. Tysabri sales fell 1.2% sequentially.

Combined interferon revenues (Avonex and Plegridy) in the fourth quarter were $597.2 million, down 7.4% year over year and 1.2% sequentially. Avonex revenues declined 8% from the year-ago quarter to $481 million. Plegridy contributed $116 million to revenues, which decreased 7% year over year.

U.S. Interferon revenues have been declining due to transition of patients to other oral or high efficacy MS therapies as well as 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Zinbryta generated no revenues in the quarter as the drug was withdrawn from the market in March 2018, due to growing safety concerns and limited commercial adoption.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 $11.7 million to total revenues in the year-ago quarter.

Spinraza (spinal muscular atrophy) sales grew 30% year over year to $469.9 million, driven by sales growth in both the United States and the ex-U.S. markets. However, sales fell 0.5% sequentially.

Spinraza U.S. sales were $236.2 million in the fourth quarter, up 5.5% sequentially, driven by increased new patient demand. In ex-U.S. markets, Spinraza sales fell 4.1% sequentially to $233.7 million, due to lower volumes in some markets stemming from loading dose dynamics, unfavorable shipment timing in certain distributor markets and pricing dynamics in certain markets.

The number of patients on Spinraza grew approximately 9% in the United States and 18% outside the United States in the quarter compared with the end of the third quarter of 2018.

In the fourth quarter of 2018, Biogen recorded biosimilar revenues of $156 million, up 28% year over year and 13.3% sequentially. Biogen markets three anti-TNF biosimilars in the EU — Flixabi (a biosimilar referencing J&J (JNJ - Free Report) /Merck’s Remicade), Benepali (a biosimilar referencing Amgen/Pfizer’s Enbrel) and Imraldi(a biosimilar referencing AbbVie’s (ABBV - Free Report) Humira).

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 $535 million.

Research and development (R&D) expenses increased 2% year over year to $602 million. Selling, general and administrative (SG&A) expenses were up 7% year over year to $591 million.

FY18 Results

The companyreported 2018 earnings per share of $26.20, which beat the Zacks Consensus Estimate of $25.84. Earnings rose 20.1% year over year, backed by higher revenues.

For full year, revenues came in at $13.45 billion, which increased 9.6% year over year and exceeded the Zacks Consensus Estimate of $13.31 billion.

2019 Guidance

Biogen provided its outlook for 2019. The company expects revenues of $ 13.6-$13.8 billion. Earnings per share are expected between $28.00 and $29.00.

The Zacks Consensus Estimate for revenues and earnings is $13.65 billion and $28.20 per share, respectively.

Our Take

Biogen beat estimates for both earnings and sales in the fourth quarter, fueled mainly by strong performance of its newest drug, Spinraza, which we believe has a multi-billion dollar potential. Biogen’s efforts to diversify beyond MS to other areas like Alzheimer’s, Parkinson's and stroke, among others and regularly in-license assets to build its pipeline are impressive.

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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