In this image from December 1, 2021, a test tube is seen in front of the displayed Biogen logo.
Ruvic Cube | Reuters
Biogen on Thursday, the company reported second-quarter earnings and revenue that beat estimates and raised its full-year forecast as the company's cost-cutting efforts showed progress and sales of its breakthrough Alzheimer's drug Leqembi and other new products exceeded expectations.
Biogen now expects full-year adjusted earnings of $15.75 to $16.25 per share. The previous forecast was $15 to $16 per share.
The biotech company also expects a low single-digit percentage decline in sales for 2024. Biogen's previous forecast assumed a low to mid single-digit percentage decline compared to the previous year.
Leqembi, which Biogen shares with Eisai, became the second drug shown to slow the progression of Alzheimer's disease to be approved in the U.S. last summer. The therapy has been slow to roll out due to bottlenecks in requirements for diagnostic tests and regular brain scans, among other things.
But demand for Leqembi appears to be increasing. Sales of around $40 million were generated in the quarter, which is higher than the $31 million expected by analysts, according to StreetAccount estimates.
After its launch last year, the drug generated sales of just $10 million.
Biogen did not disclose how many patients are currently taking Leqembi. In May, the company said about 5,000 people were taking the drug.
Nevertheless, Leqembi faces hurdles in Europe, where a drug regulator has advised against approving the drug because of the risk of brain swelling and bleeding. Biogen was “quite surprised and quite stunned” by the decision and will seek a new review, said company boss Chris Viehbacher in a press conference on Thursday.
Biogen hopes Leqembi and other new products will fuel growth as the company cuts costs and grapples with falling demand for its multiple sclerosis therapies, some of which face competition from cheaper generics.
“I can say today that all product launches met or exceeded expectations,” he said.
According to Viehbacher, the company is on track to achieve gross cost savings of approximately $1 billion and net cost savings of $800 million by the end of 2025.
Viehbacher added: “While our operating expenses have decreased significantly, we have been able to invest heavily in the launch of new products and in the research and development projects that we consider most important.”
Here's what Biogen reported for the second quarter, compared to Wall Street expectations, based on an LSEG analyst survey:
- Earnings per share: $5.28 adjusted vs. $4.03 expected
- Revenue: $2.47 billion compared to expected $2.38 billion
Biogen reported revenue of $2.47 billion for the quarter, roughly the same as the previous year.
The pharmaceutical company reported net income of $583.6 million, or $4 per share, in the second quarter. In the same period last year, net income was $591.6 million, or $4.07 per share.
Adjusted for one-time items, the company reported earnings of $5.28 per share.
In addition to Leqembi, investors are also closely watching other newly launched drugs, including Skyclarys, which was created from Biogen's acquisition of Reata Pharmaceuticals in July 2023.
The drug generated sales of $100 million in the second quarter. Analysts had expected the drug to bring in $92.3 million in the quarter, according to StreetAccount.
The US Food and Drug Administration gave Skyclarys the green light last year, making it the first approved drug for Friedreich's ataxia, a rare degenerative genetic disease that can affect walking and coordination in children as young as five.
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Viehbacher said Skyclarys' launch is going “extremely well.” The company expects to launch the drug in 20 countries by the end of the year, he added.
Zurzuvae, the first pill to treat postnatal depression, posted second-quarter sales of $14.9 million. Analysts had only expected sales of $11 million, according to StreetAccount estimates.
Biogen is releasing this pill jointly with Sage Therapeutics.
Meanwhile, Biogen's sales of multiple sclerosis treatments fell 5% to $1.15 billion in the second quarter as some products face competition from cheaper generics.
Nevertheless, some of these drugs achieved higher sales than expected.
Tecfidera, for example, posted second-quarter sales of $252.2 million, relatively unchanged from the same period last year. Analysts had expected the once-blockbuster drug to post quarterly sales of $233.3 million, according to StreetAccount.
Clarification: This story has been updated to clarify that Biogen acquired Reata Pharmaceuticals in July 2023.
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