) reported third quarter earnings per share of $1.90, well above
the Zacks Consensus Estimate of $1.61 and 19.5% above the
year-ago earnings of $1.59. Higher revenues boosted earnings.
Third quarter 2012 revenues increased 6% to $1.385 billion.
Revenues were just above the Zacks Consensus Estimate of $1.384
Including one-time items, third quarter 2012 earnings
increased 16.8% to $1.67 per share.
The Quarter in Detail
Third quarter Tysabri revenues declined 1% to $275 million
from the year-ago period. Tysabri revenues also declined 1.8% on
a sequential basis. Global in-market net revenues of Tysabri,
which is partnered with
), came in at $404 million (up 3%) in the third quarter of 2012.
Tysabri global revenues consisted of US revenues of $230 million
and ROW (Rest of the World) revenues of $173 million.
On its second quarter call, Biogen had noted that it expects
Tysabri sales to continue being impacted by a deferred revenue
issue in Italy despite its efforts to resolve the situation.
Biogen estimates that as of the end of September 2012, about
71,100 patients were on commercial and clinical Tysabri therapy
worldwide. This represents an increase from the 69,100 patients
reported by the company in the second quarter of 2012.
Meanwhile, Avonex, Biogen's lead multiple sclerosis (MS)
product, posted third quarter revenues of $736 million (up 8%).
On a sequential basis, Avonex revenues were down 3.5%. On the
second quarter call, Biogen had noted that there could be some
inventory work-down for Avonex Pen as well as pre-filled
Biogen has been working on driving Avonex revenues. The
company launched Avonex Pen in the US earlier this year. Avonex
Pen helps improve convenient administration. The rollout of
Avonex Pen in the EU and US should increase patient and physician
interest in Avonex.
We note that both Avonex and Tysabri are facing additional
competition in the form of
) Gilenya which was launched in early Oct 2010. Another recent
Biogen is looking to bring BG-12, its oral MS candidate, to
market in early 2013. The company reported impressive data on the
candidate, which is currently under US and EU review. However,
the FDA recently extended the review period for BG-12 by three
The extension of the FDA's review period means that a response
regarding BG-12's approvability should be out in March-April 2013
instead of later this year. BG-12 could become a leader in the
oral MS market once launched. The company is seeking approval in
Australia, Canada, and Switzerland as well.
Rituxan revenues increased 8% to $288 million in the third
quarter. Biogen and partner
) have been working on driving Rituxan growth by expanding the
label for additional indications.
Earnings Outlook Up Again
Biogen raised its earnings guidance for 2012 again. The
company now expects earnings in the range of $6.40 - $6.50 per
share on mid-to-high single digit revenue growth. The company was
previously expecting earnings to exceed $6.20 per share on
mid-single digit revenue growth. The Zacks Consensus Estimate for
2012 currently stands at $6.46 per share.
While the company expects to spend 24% to 25% of total revenue
on R&D (including a $20 - $30 million upfront payment that
could be made in the fourth quarter on the signing of a discovery
collaboration currently being negotiated), SG&A spend is
expected to be about 22% to 23% of total revenue.
Neutral on Biogen
We currently have a Neutral recommendation on Biogen, which
carries a Zacks #3 Rank (short-term Hold rating). Biogen has some
important data read-outs lined up in the coming months. These
include data on rFVIIIFc (hemophilia A), dexpramipexole for
amyotrophic lateral sclerosis or Lou Gehrig's disease and
PEGylated interferon beta-1a for multiple sclerosis.
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