Biogen Beats, Tecfidera Continues to Shine - Analyst Blog


Biogen Idec ( BIIB ) reported fourth quarter earnings per share of $2.34 (including the impact of stock-based compensation expense), well above the Zacks Consensus Estimate of $2.22 and 67.1% above the year-ago earnings.

Fourth quarter 2013 revenues increased 29% to $1.97 billion, above the Zacks Consensus Estimate of $1.93 billion. Newly launched multiple sclerosis (MS) drug, Tecfidera, drove fourth quarter results.

Including one-time items, fourth quarter 2013 earnings increased 56.1% to $1.92 per share.

Full-year earnings grew 37.2% to $8.93 per share, beating the Zacks Consensus Estimate of $8.81 per share. Revenues increased 25.7% to $6.93 billion, above the Zacks Consensus Estimate of $6.89 billion.

The Quarter in Detail

Fourth quarter Tysabri revenues increased 45% to $427 million from the year-ago period. Biogen is now booking 100% of Tysabri revenues following its acquisition of Elan's rights in Tysabri. Global in-market net revenues of Tysabri declined 1%. We believe global in-market net revenues were impacted by the switching of patients to Tecfidera as well as oral competition in the EU.

Biogen has yet to record a benefit of about $95 million related to the pending settlement with the Italian National Medicines Agency.

Meanwhile, Avonex, Biogen's lead MS product, posted fourth quarter revenues of $751 million. While revenues remained unchanged from the year-ago period, they improved 2.5% sequentially. Avonex revenues in ex-U.S. markets were $277 million.

Rituxan and Gazyva revenues declined 4% to $269 million in the fourth quarter.

Tecfidera, the latest offering from Biogen's MS portfolio, continues to impress with sales coming in at $398 million - this includes patient demand of approximately $348 million and inventory stocking of approximately $42 million. Fourth quarter Tecfidera sales were well above third quarter sales of $286 million. Tecfidera is the leading oral MS therapy in the U.S. Biogen had launched Tecfidera in early Apr 2013 in the U.S.

Mixed Guidance for 2014

Biogen provided guidance for 2014. The company expects earnings in the range of $11.00 - $11.20 per share on revenue growth of 22% - 25%. The Zacks Consensus Estimate of $11.79 per share is far above the company's guidance range. However, revenue guidance is above the current expectations of revenue growth of 20%.

The company expects to spend 20% - 22% of total revenues and 22% - 23% of total revenues on R&D and SG&A, respectively.

Our Take

Biogen ended the year on a strong note with Tecfidera continuing with its impressive performance. However, the company's guidance for 2014 was mixed with earnings guidance falling well short of expectations and revenue guidance coming above. This year, the company could launch three products: Eloctate and Alprolix for hemophilia patients and Plegridy for MS. Moreover, Tecfidera should gain EU approval shortly.

Biogen is a Zacks Rank #2 (Buy) stock. Some better-ranked stocks in the health care sector include Medivation Inc. ( MDVN ), Actelion Ltd. ( ALIOF ) and Affymetrix Inc. ( AFFX ). All three carry a Zacks Rank #1 (Strong Buy).

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.

This article appears in: Investing , Business , Stocks

Referenced Stocks: AFFX , ALIOF , BIIB , MDVN , MS

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