Biogen Inc. (BIIB) released its fourth-quarter financial results today, falling short of Wall Street expectations due to declining multiple-sclerosis product sales. Despite the disappointing outcome, the company remains focused on its transition to newer drugs for future growth.
Financial Overview
In the fourth quarter, Biogen reported a net income of $249.7 million, or $1.71 per share, compared to $550.4 million, or $3.79 per share, in the same period last year. Adjusted earnings per share were recorded at $2.95, missing the FactSet consensus of $3.18. Total revenue for the quarter amounted to $2.386 billion, a 6% decrease from the previous year and falling short of the FactSet consensus of $2.466 billion.
These results were impacted by the costs associated with discontinuing Biogen's involvement in the controversial Alzheimer's drug Aduhelm. This decision had a negative impact on earnings, reducing them by 35 cents per share. However, the company has reallocated most of its resources to its Alzheimer's business.
Looking ahead to the full year 2024, Biogen anticipates adjusted earnings per share to range between $15.00 and $16.00. The company also expects total revenue to decline by a low- to mid-single-digit percentage compared to 2023.
Shifting Focus
Biogen is actively shifting its focus from older multiple-sclerosis drugs to newer sources of growth. The company has recently gained approval for several drugs, including Leqembi for Alzheimer's treatment, Zurzuvae for postpartum depression treatment, and Skyclarys for Friedreich's ataxia treatment.
Multiple Sclerosis Product Sales
Though sales of multiple sclerosis products experienced an 8% decline in the fourth quarter compared to the previous year, Biogen's drugs Tysabri and Tecfidera outperformed analysts' expectations. Tysabri generated $464.7 million in sales, while Tecfidera recorded $244.3 million in sales.
Biogen's commitment to exploring new avenues for growth remains steadfast, even as it navigates challenges within its multiple-sclerosis product sales.
Biogen Faces Challenges with Slow Launch of Alzheimer's Treatment
According to analysts, Biogen's stock has struggled in the past year due to the relatively slow launch of its Alzheimer's treatment, Leqembi. Currently, approximately 2,000 patients are using the drug, which is a joint venture between Biogen and Eisai Co. Ltd.
Although the treatment obtained full U.S. regulatory approval last year, Biogen's CEO, Chris Viehbacher, acknowledged some setbacks during a press conference on Tuesday. Initially, the drugmakers aimed to have around 10,000 patients on Leqembi by the second quarter of this year. However, various challenges, such as limited capacity at infusion centers and lengthy wait times to see neurologists, have impacted the drug's rollout.
To maintain a competitive advantage over Eli Lilly & Co.'s potential competitor drug, donanemab, analysts speculate that Biogen is working on a new subcutaneous version of Leqembi. Currently administered through a twice-monthly intravenous infusion, the under-the-skin injection would offer improved convenience. Eisai, responsible for Leqembi's regulatory matters, plans to submit the subcutaneous formulation for U.S. regulatory approval by the end of March.
In addition, Biogen reiterated its cost-cutting program announced last year. This initiative is expected to generate approximately $1 billion in gross annual savings by 2025.
Biogen shares have experienced a decline of 5.4% this year to date, while the S&P 500 has shown a gain of 5.3%.
