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Why Is Biogen Inc. (BIIB) Down 5% Since Last Earnings Report?

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  • BIIB

It has been about a month since the last earnings report for Biogen Inc. (BIIB). Shares have lost about 5% in that time frame, underperforming the S&P 500.

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

Biogen Q3 Earnings Top, Aduhelm Sales Negligible

Biogen reported third-quarter 2021 earnings per share of $4.77, which beat the Zacks Consensus Estimate of $4.15. Earnings however declined 15.4% year over year due to lower revenues.

Sales came in at $2.78 billion, down 18% (both actual and constant currency basis) from the year-ago quarter, hurt by lower sales of Tecfidera and Spinraza. Sales, however, beat the Zacks Consensus Estimate of $2.68 billion.

Product sales in the quarter were $2.21 billion, down 18% year over year. Royalties on sales of Ocrevus were $264.3 million in the quarter, down 3% year over year. Revenues from Biogen’s share of Rituxan and Gazyva declined 47.5% from the year-ago period to $151.1 million. Other revenues rose 25.5% in the quarter to $157.8 million.

Multiple Sclerosis Revenues

Biogen’s MS revenues were $1.82 billion in the reporter quarter, including Ocrevus royalties, which declined 19% (down 20% on constant currency) year over year.

Tecfidera sales declined 47.7% to $498.6 million in the quarter as multiple generic products have been launched in the United States. U.S. Tecfidera revenues were flat at $179 million. Outside U.S. revenues increased 13% to $319 million due to underlying patient growth. U.S. Tecfidera sales are expected to continue to decline in the fourth quarter.

Vumerity, launched in the United States late in 2019, recorded $120.9 million in sales, higher than $90.9 million in the previous quarter.

Total Fumarates (Tecfidera + Vumerity) revenues were $619.5 million in the quarter, down 36% year over year.  

Tysabri sales rose 1.2% year over year to $522.8 million despite some negative channel dynamics in the United States. Global Tysabri patients grew 7% year over year.

In 2021, Tysabri sales volumes are expected to increase compared to 2020 despite increased competitive pressure and price reductions in certain European markets.

Combined interferon revenues (Avonex and Plegridy) in the quarter were $387.5 million, down 18.3% year over year.

Other Products

Sales of Spinraza declined 10% (11% on a constant currency basis) year over year to $444.1 million. Spinraza’s U.S. sales were $140.0 million in the quarter, down 23% year over year due to increased competition in the United States and the impact of COVID-19. However, discontinuation rates in the United States improved from the previous quarter levels. In ex-U.S. markets, Spinraza sales declined 2.4% year over year to $304.3 million due to competition and pricing pressure in Europe, partially offset by growth in regions outside of the Europe.

In 2021, Spinraza’s sales growth rate is expected to be hurt by a lower rate of new patient starts due to increased competition and the impact of loading dose dynamics as patients transition to dosing once every four months. Lower prices in some international markets may also hurt sales.

In the quarter, biosimilars revenues declined 2% year over year (4% in constant currency) to $203 million. Sales continued to be impacted by pricing pressure and the impact of COVID-19.

Benepali recorded sales of $120.8 million in the quarter, down 2.7% year over year. Flixabi sales were $24.6 million, down 10.5% year over year. Imraldi sales of $57.4 million rose 2.1% year over year.

New Alzheimer’s drug, Aduhelm recorded sales of $0.3 million in the third quarter, less than $1.6 million in the second quarter. The launch of the drug has been slower than expected as patient access is limited pending the CMS reimbursement decision.

On the conference call, management said that approximately 120 sites had infused at least one patient. Sales are expected to be minimal until the final National Coverage Decision (NCD) from the CMS (draft decision January 2022, final decision April 2022) for the class of anti-amyloid antibodies like Aduhelm in April.

Research and development (R&D) expenses were $702 million, down 38% year over year. The R&D costs included approximately $125 million of upfront payments related to a collaboration with InnoCare.

Selling, general and administrative (SG&A) expenses increased 14% year over year to $651 million to support Aduhelm’s launch.

In the quarter, Biogen repurchased approximately 2.2 million shares worth $750 million. Biogen had $2.8 billion remaining under its new share buyback plan of $5 billion as of Sep 30.

2021 Guidance

The company raised its total revenue as well as earnings guidance for 2021. Total revenues are expected in the range of $10.8-$10.9 billion in 2021 compared with $10.65-$10.85 billion previously. The company expects significant erosion of Tecfidera’s sales in the United States in 2021. The guidance also assumes significant erosion of Rituxan in the United States. The guidance assumes modest revenues from Aduhelm in 2021. Aduhelm sales are expected to increase in 2022 depending on the NCD outcome.

The earnings per share guidance was increased from a range of $17.50-$19.00 to $18.85-$19.35.

Adjusted R&D expense guidance was maintained in the range of $2.45 billion to $2.55 billion. Adjusted SG&A costs are expected between $2.6 billion and $2.7 billion (maintained).

SG&A costs are expected to be seasonally higher in the second quarter.

The reduction in revenues from Tecfidera and Rituxan, both high margin products, is expected to put pressure on gross margins in 2021.

Capital expenditures are anticipated between $250 million and $300 million, much less than the previous range of $375 million and $425 million due to delayed spend on certain projects.


How Have Estimates Been Moving Since Then?

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

VGM Scores

Currently, Biogen Inc. has an average Growth Score of C, a grade with the same score on the momentum front. However, the stock was allocated a grade of A on the value side, putting it in the top quintile for this investment strategy.

Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.


Estimates have been 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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