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Biogen (BIIB) Beats on Q3 Earnings, Eyes FDA Nod for Aducanumab

Zacks Equity Research

Biogen Inc. BIIB reported third-quarter 2019 earnings per share of $9.17, which comprehensively beat the Zacks Consensus Estimate of $8.28. Earnings rose 24% year over year, backed by higher revenues, lower tax rate and a lower share.

Sales of this neuroscience-focused biotech came in at $3.6 billion, up 5% from the year-ago quarter. Sales also beat the Zacks Consensus Estimate of $3.53 billion.

Revenue growth was principally driven by higher sales of its key multiple sclerosis (MS) drugs and continued global launch of spinal muscular atrophy (SMA) drug, Spinraza.

To Pursue FDA Approval for Aducanumab

In a separate press release today, Biogen released results from a new analysis of a larger dataset of the discontinued ENGAGE and EMERGE phase III studies on aducanumab in patients with early Alzheimer’s disease. This analysis was conducted in consultation with the FDA. We remind investors that in March, Biogen and its Japanese partner Eisai had discontinued ENGAGE and EMERGE studies following a futility analysis.

The new data showed that aducanumab reduced clinical decline of Alzheimer’s disease in such patients as measured by the pre-specified primary and secondary endpoints. The data also showed that aducanumab is “pharmacologically and clinically active” as determined by dose-dependent effects in reducing accumulation of amyloid, a kind of protein, in the arteries of the brain. Based on this data, Biogen plans to submit a biologics license application (BLA) seeking approval of aducanumab to the FDA in early 2020. This new analysis of a larger dataset includes additional data that became available after the pre-specified futility analysis. This includes a subset of patients getting the highest dose of the drug.

The promising new data from two failed studies on aducanumab have revived hopes for approval of this almost-written off experimental Alzheimer’s therapy.

Quarter in Detail

Product sales in the quarter were $2.9 billion, up 4% year over year. Royalties on sales of Roche’s RHHBY MS drug, Ocrevus were $188 million in the quarter, up 37% year over year. Though Ocrevus poses strong competition to Biogen’s MS drugs, the company receives royalties on U.S. sales of Ocrevus from Roche. Revenues from Biogen’s share of Rituxan and Gazyva operating profits increased 9% from the year-ago period to $408 million. Other revenues declined 26% in the quarter to $110 million.

Biogen’s MS revenues of $2.35 billion in the reporter quarter, including Ocrevus royalties, rose 2% year over year but declined 2% sequentially. 

Tecfidera sales rose 3% year over year to $1.12 billion driven by revenue growth in international markets. However, Tecfidera global sales declined 2% sequentially. U.S. sales in the quarter were $842.0 million, flat year over year while ex-U.S. sales were $280.4 million, up 13.1%.

Tysabri sales rose 3% year over year and 2% sequentially to $484 million. Tysabri U.S. sales rose 3.9% to $263.0 million in the quarter. International revenues rose 1.6% to $220.6 million.

Combined interferon revenues (Avonex and Plegridy) in the quarter were $530 million, down 10% year over year. Avonex revenues declined 13% from the year-ago quarter to $420 million. Plegridy contributed $110 million to revenues, up 2% 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.

Sales of Spinraza increased 17% year over year and 12% sequentially to $547.0 million driven by higher sales in the United States as well as ex-U.S. markets.

Spinraza U.S. sales were $236.7 million in the quarter, up 5.7% year over year driven by continued patient growth. In ex-U.S. markets, Spinraza sales rose 27.3% year over year to $310.4 million.

The number of patients on Spinraza grew approximately 3% in the United States and 18% outside the United States in the quarter compared with the end of the second quarter.

Samsung Bioepis, the joint venture between Biogen and Samsung BioLogics, markets three anti-TNF biosimilars in the EU — Flixabi (a biosimilar referencing J&J JNJ/Merck’s Remicade), Benepali (a biosimilar referencing Amgen/Pfizer’s Enbrel) and Imraldi (a biosimilar referencing AbbVie’s [ABBV] Humira). In the quarter, biosimilars revenues increased 36.3% year over year to $184 million driven by Imraldi which was launched in mid-October last year. It generated sales of $49 million in the third quarter compared with $47 million in the second quarter. Benepali recorded sales of $116 million in the quarter, down 6% year over year. Flixabi sales of $18 million rose 63% year over year.

Research and development (R&D) expenses rose 6% year over year to $540 million. Selling, general and administrative (SG&A) expenses rose 11% year over year to $547 million.

Our Take

Biogen beat estimates for both earnings and sales in the third quarter. However, the results were overshadowed by Biogen’s announcement that it will pursue regulatory approval of aducanumab, which pushed its stock up almost 35% in pre-market trading. However, this year (till Oct 21), Biogen’s shares declined 25.7% compared with the industry’s decrease of 5.8% in the same time frame.



We like Biogen’s efforts to regularly in-license assets to build its pipeline. Several of these assets have transformative potential. In the third quarter alone, Biogen initiated two new clinical programs targeting Parkinson’s disease and brain contusion. Nine important data readouts are expected by the end of 2020.However, Biogen is heavily reliant on sales of its drugs for MS, which is a highly competitive disease space. Also, potential competition to Spinraza from Novartis’ oral gene therapy for SMA Type 1, Zolgensma, which was approved by the FDA for use in children less than 2 years old in May 2019, 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. price-consensus-eps-surprise-chart | Biogen Inc. Quote


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