Biogen hikes annual guidance as second-quarter profit jumps 72%, but Spinraza sales lag estimates

Headline results for the second quarter:

Revenue

$3.6 billion (forecasts of $3.5 billion)

+8%

Profit

$1.5 billion

+72%

Note: All changes are versus the prior-year period unless otherwise stated

What the company said:

"Biogen delivered solid performance globally in the second quarter, and we believe we are on track for a strong year," commented CEO Michel Vounatsos. The executive noted that the company "added four new programmes to our pipeline this quarter," including via the $800-million acquisition of Nightstar Therapeutics, which "has provided us with two potentially first-in-class mid-to late-stage gene therapy programmes in specialty ophthalmology."

Other results:

  • Multiple sclerosis product sales: $2.4 billion, +3%
    • Tecfidera: $1.2 billion, +6%, above forecasts of $1.1 billion
    • Tysabri: $475 million, +2%
    • Avonex: $438 million, -13%
    • Plegridy: $117 million, -6%
  • Spinraza: $488 million, +15%, below estimates of around $531 million, as sales faced pressure from pricing adjustment in France and as patients moved to a lower-priced maintenance dose from an induction dose in some other markets
  • Rituxan/Gazyva: $394 million, +4%
  • Ocrevus royalties: $183 million, +62%
  • Biosimilars: $184 million, versus $127 million in the prior year, primarily driven by Imraldi

Looking ahead:

Biogen now expects annual revenue of between $14 billion and $14.2 billion, lifted from a prior estimate of $13.6 billion to $13.8 billion. Meanwhile, earnings per share are now forecast in the range of $31.50 to $32.30, an increase from an earlier prediction of $28 to $29. Analysts expect full-year earnings of $29.70 per share.

Commenting on Spinraza, which is now facing competition from Novartis' Zolgensma (onasemnogene abeparvovac), which gained FDA approval in May as the first gene therapy for spinal muscular atrophy (SMA), Biogen said it sees ample opportunity for growth as the drug has only reached 20% of adults in the US. "We believe Spinraza will remain a foundation of care in SMA for years to come," research chief Michael Ehlers commented.

What analysts said:

RBC analyst Brian Abrahams remarked that Zolgensma may take time to cannibalise Spinraza given its narrow initial label, although he suggested that the latter's sales miss in the second quarter may prompt some analysts to become more conservative on expectations. Meanwhile, Credit Suisse analyst Evan Seigerman said the Novartis treatment could begin to eat into Spinraza sales in 2020. "In a vacuum, this quarter was good, but the results don't solve a lot of our longer term concerns about the growth profile of the company," he added.

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