Biogen, Inc. BIIB reported first-quarter 2021 earnings per share of $5.34, which beat the Zacks Consensus Estimate of $5.06. Earnings declined 41.6% year over year due to lower revenues.
Sales came in at $2.69 billion, down 24% (down 25% on a constant currency basis) from the year-ago quarter, hurt by lower sales of Tecfidera, Spinraza and biosimilar drugs due to increased competition. Sales, however, slightly beat the Zacks Consensus Estimate of $2.68 billion.
Product sales in the quarter were $2.21 billion, down 23.9% year over year. Royalties on sales of Roche’s RHHBY Ocrevus were $209.3 million in the quarter, up 29% year over year. Revenues from Biogen’s share of Rituxan and Gazyva declined 49.8% from the year-ago period to $179.7 million. Other revenues declined 14.6% in the quarter to $93.3 million.
Multiple Sclerosis Revenues
Biogen’s MS revenues were $1.69 billion in the reporter quarter, including Ocrevus royalties, which declined 26% year over year.
Tecfidera sales declined 56.4% to $479.3 million in the quarter, hurt by the launch of multiple generic products in the United States.
Vumerity, launched in the United States late in 2019, recorded $73.6 million in sales, higher than $38.9 million in the previous quarter due to improvement in new prescription trends.
Tysabri sales declined 3.7% year over year to $503.3 million.
Combined interferon revenues (Avonex and Plegridy) in the quarter were $400.5 million, down 14.1% year over year. Avonex revenues declined 15.1% from the year-ago quarter to $311.1 million. Plegridy contributed $89.4 million to revenues, down 10.2% year over year.
Sales of spinal muscular atrophy (SMA) drug Spinraza declined 8% year over year to $521 million. Sales were however better than the Zacks Consensus Estimate of $484 million.
In the quarter, biosimilars revenues declined 6% year over year to $205 million. Samsung Bioepis, the joint venture between Biogen and Samsung BioLogics, markets three anti-TNF biosimilars in the EU — Flixabi (a biosimilar referencing J&J [JNJ]/Merck’s MRK Remicade), Benepali (a biosimilar referencing Amgen/Pfizer’s Enbrel) and Imraldi (a biosimilar referencing AbbVie’s Humira).
Benepali recorded sales of $121.7 million in the quarter, down 8.8% year over year. Flixabi sales of $25.5 million rose 7.6% year over year. Imraldi generated sales of $57.9 million in the quarter, down 6% year over year.
Research and development (R&D) expenses were $514 million, up 8% year over year. Selling, general and administrative (SG&A) expenses increased 5% year over year to $595 million.
The company maintained its total revenue guidance in the range of $10.45-$10.75 billion for 2021. With multiple generic versions of Tecfidera now launched, the company expects significant erosion of the drug’s sales. The guidance also assumes significant erosion of Rituxan in the United States.
Earnings per share are now expected between $17.50 and $19.00 versus $17.00 and $18.50 previously.
The guidance assumes the approval of Biogen’s controversial Alzheimer’s candidate, aducanumab in the United States by Jun 7, 2021. In January, the FDA extended the review period of the biologics license application (BLA) filing for aducanumab by three months and will now give its decision on Jun 7, delayed from the prior expectation of March 2020. However, uncertainty looms large on the FDA’s final decision. In November 2020, an FDA advisory committee voted against approving aducanumab. The company expects only modest revenues from aducanumab in 2021.
Adjusted R&D expenses are expected to be between $2.3 billion and $2.4 billion (previously $2.35 billion - $2.45 billion) and adjusted SG&A costs are expected to be between $2.6 billion and $2.7 billion (maintained).
The reduction in revenues from Tecfidera and Rituxan, both high margin products, is expected to put pressure on gross margins in 2021.
Biogen beat estimates on both counts. The company raised its earnings guidance for the year while keeping the sales range intact. Shares rose 1.2% in pre-market trading. Biogen’s stock has risen 10.2% this year so far against a decrease of 3.7% for the industry.
Biogen boasts a robust late-stage pipeline with several important data readouts expected in 2021. There is 50/50 FDA approval potential of aducanumab.
However, multiple generic versions of blockbuster drug, Tecfidera have been launched, which are significantly eroding the drug’s sales and the company’s overall topline. Sales of Spinraza are being hurt due to COVID-19 and the drug’s competitive environment is also getting challenging. The initial rollout of Vumerity has been slow due to COVID-19.
Biogen has a Zacks Rank #3 (Hold) currently. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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