Biogen (BIIB) Q4 Earnings Top Estimates; '17 Sales View Soft

Biogen Inc. BIIB, a well-known name in the multiple sclerosis (MS) market, reported mixed fourth-quarter 2016 results with the company surpassing earnings expectations while missing the same for sales. Moreover, the company’s 2017 sales guidance fell short of expectations.

In the past one year, Biogen’s shares declined 0.1%, comparing favourably with the Zacks classified Biomed-Genetics industry’s decline of 9.5%.

Coming back to the results, Biogen reported fourth-quarter 2016 earnings per share of $5.04, beating the Zacks Consensus Estimate of $4.97 by 1.4% and increasing 12% year over year.

Sales came in at $2.87 billion, up 1% from the year-ago period. Sales, however, missed the Zacks Consensus Estimate of $2.95 billion by 2.5%.

Quarter in Detail

Oral multiple sclerosis (MS) drug Tecfidera rose 1% from the year-ago period to $1.0 billion. However, the drug recorded a 3% sequential decline in revenues. This included U.S. sales of $799.7 million and ex-U.S. sales of $202.3 million.

Fourth-quarter Tysabri revenues declined 1% year over year and 8% sequentially to $474 million (U.S. $288.7 million, ex-U.S. $185.2 million).

Combined interferon revenues (Avonex and Plegridy) in the fourth quarter were $688 million (U.S. $488.1 million, ex-U.S. $200.1 million), down 7% from the year-ago period and 3% sequentially. Avonex revenues declined 12% from the year-ago period to $564 million.

Plegridy contributed $125 million to fourth-quarter 2016 revenues, up 21% year over year but down 3% sequentially.

Zinbryta, launched in collaboration with AbbVie Inc. ABBV in August last year, contributed $6 million to revenues in the quarter compared with $2 million in the third quarter.

Alprolix and Eloctate, Biogen’s hemophilia treatments, recorded revenues of $93 million and $149 million, up 9% and 13%, respectively, year over year.

In the quarter, Biogen recorded biosimilar revenues of $53 million compared with $31 million in the third quarter. Biogen markets Flixabi, a biosimilar referencing Johnson & Johnson’s JNJ blockbuster drug Remicade and Benepali, a biosimilar referencing Amgen Inc.’s AMGN Enbrel in Europe.

Revenues from Anti-CD20 therapeutic programs, which include Biogen’s share of Rituxan and Gazyva operating profits, declined 5% from the year-ago period to $318 million in the fourth quarter.

In Dec 2016, Biogen and partner Ionis Pharmaceuticals got a boost with the FDA approving Spinraza for spinal muscular atrophy (SMA). Spinraza brought revenues of $5 million in the fourth quarter.

Research and development spend rose 2% in the reported quarter to $531 million while SG&A spend came in at $484 million, 17% higher year over year.

In the quarter, the company repurchased shares worth $651 million.

2016 Results

Full-year 2016 sales rose 6% to $11.45 billion, falling short of the Zacks Consensus Estimate of $11.52 billion. Sales were slightly above the guidance range of $11.2 billion to $11.4 billion.

Adjusted earnings for 2016 were $20.22 per share, above the Zacks Consensus Estimate of $20.17 and up 19% year over year. Earnings were also higher than the guided range of $19.70 to $20.00 per share.

2017 Sales Outlook Falls Short

The company issued its 2017 outlook. Biogen said it expects earnings of $20.45 to $21.25 per share. The Zacks Consensus Estimate of $21.12 falls within the guidance range, However, revenues are expected in a range of $11.1 billion to $11.4 billion in 2017, short of the Zacks Consensus Estimate of $12.02 billion. The guidance includes one month of contribution from the hemophilia business, which Biogen expects to spin-off by Feb 1, 2017. The spin-off will allow Biogen to focus on the neurology segment, its key area of expertise.

Our Take

Biogen’s fourth-quarter saw a slowdown in sales of its multiple sclerosis business. However, the hemophilia franchise performed well. However, the launch of Spinraza was a huge boost for Biogen. With the drug being the first treatment to be approved for SMA, a leading genetic cause of death in infants and toddlers that is marked by progressive, debilitating muscle weakness, the market potential is huge.

Biogen carries a Zacks Rank #2 (Buy). 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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