Biogen, a biotech company, recently reported its second-quarter earnings and revenue, exceeding estimates and raising its full-year guidance. The company’s cost-cutting efforts have shown progress, and sales of its breakthrough Alzheimer’s drug, Leqembi, along with other new products, have surpassed expectations. Biogen now predicts adjusted earnings for the full year to be between $15.75 and $16.25 per share, an increase from the previous forecast of $15 to $16 per share.
Additionally, Biogen expects a low-single-digit percentage decline in sales for 2024, which is an improvement from their previous outlook of a low- to mid-single-digit decrease compared to the previous year. Leqembi, which Biogen shares with Eisai, became the second drug approved to slow the progression of Alzheimer’s in the U.S. last summer. However, the drug’s launch has been gradual due to various issues, including diagnostic test requirements and the need for regular brain scans.
Despite these challenges, Leqembi’s sales are picking up momentum, with approximately $40 million in sales for the quarter, surpassing the $31 million estimated by analysts. It’s worth noting that the drug only generated $10 million in sales last year after its launch. Biogen did not disclose the current number of patients using Leqembi, but in May, they revealed that around 5,000 people were taking the drug.
While Leqembi has been successful in the U.S., it faces obstacles in Europe. A drug regulator in Europe recommended against approving the treatment due to its potential risk of brain swelling and bleeding. Biogen’s CEO, Chris Viehbacher, expressed surprise and confusion over the decision and stated that the company would seek a reexamination of it.
Biogen’s growth strategy relies on the success of Leqembi and other new products as the demand for its multiple sclerosis therapies declines. Some of these therapies face competition from cheaper generics. Viehbacher expressed confidence in the launch of their new products, stating that they are in line with or exceeding expectations.
The company is aiming to achieve approximately $1 billion in gross cost savings, or $800 million in net savings, by the end of 2025. Despite reducing operating expenses, Biogen has been able to invest significantly in new product launches and research and development projects that they consider crucial.
In the second quarter, Biogen reported adjusted earnings per share of $5.28, surpassing the expected $4.03. The company’s revenue for the quarter was $2.47 billion, slightly higher than the anticipated $2.38 billion. Biogen’s sales for the quarter remained flat compared to the same period last year, totaling $2.47 billion. The net income for the second quarter was $583.6 million, or $4 per share, slightly lower than the $591.6 million, or $4.07 per share, from the previous year. However, after adjusting for one-time items, the company’s earnings per share were $5.28.
Apart from Leqembi, investors are closely monitoring other newly launched drugs, including Skyclarys, which came from Biogen’s acquisition of Reata Pharmaceuticals in July 2023. Skyclarys, the first approved treatment for Friedreich’s ataxia, generated $100 million in sales for the second quarter, surpassing the expected $92.3 million.
Furthermore, the first pill for postpartum depression, Zurzuvae, which Biogen shares with Sage Therapeutics, achieved second-quarter sales of $14.9 million, exceeding the estimated $11 million. However, sales of Biogen’s multiple sclerosis treatments decreased by 5% to $1.15 billion in the second quarter due to competition from cheaper generics. Despite this decline, some of these drugs, such as Tecfidera, performed better than expected, with revenue of $252.2 million, relatively flat compared to the previous year.
Biogen’s CEO, Viehbacher, expressed satisfaction with the launch of Skyclarys and expects the drug to be marketed in 20 countries by the end of the year. Overall, Biogen’s second-quarter results indicate positive progress, with strong sales from Leqembi, Skyclarys, and Zurzuvae, offsetting the decline in multiple sclerosis treatments. The company’s cost-cutting efforts and investment in new product launches position them for future growth and success in the biotech industry.
