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Biogen (BIIB +0.37%) posted solid revenue and earnings growth when it released second-quarter earnings on Thursday. But the good earnings news was trumped by the announcement that its CEO, George Scangos, will step down as soon as a replacement can be found. At least Scangos is going out on a high note in terms of sales and earnings.
Biogen results: The raw numbers
|
Metric |
Q2 2016 Actuals |
Q2 2015 Actuals |
Growth (YOY) |
|---|---|---|---|
|
Revenue |
$2.89 billion |
$2.59 billion |
12% |
|
Income from operations |
$1.46 billion |
$1.23 billion |
18% |
|
Adjusted earnings per share |
$5.21 |
$4.22 |
23% |
Data source: Company press release.
What happened with Biogen this quarter?
- Biogen's top-selling multiple sclerosis drug, Tecfidera, continues its solid growth, with sales jumping 12% year over year. It's not the hyper-growth investors have seen in the past, but it's still a solid increase.
- The transition from Avonex to Plegridy, which can be taken less frequently, continues: Sales of Avonex are down 2% year over year, while sales of Plegridy are up 65% year over year. When you combine the two, Biogen saw a 6% increase for the class of multiple sclerosis that these two drugs belong to.
- Sales of Biogen's other multiple sclerosis drug, Tysabri, increased a modest 7% year over year.
- Biogen's recently launched hemophilia drugs, Eloctate and Alprolix, saw year-over-year revenue increases of 68% and 48%, respectively, though they're both far from blockbusters, with respective second-quarter sales of $125 million and $80 million.
- Biogen gained FDA approval for Zinbryta, its newest multiple sclerosis drug that was developed in conjunction with AbbVie (ABBV 1.13%).
What management had to say
When asked about the company's strategy for making acquisitions and licensing deals, Scangos was adamant that his departure would change nothing:
I don't think the CEO transition affects these goals at all. The company's committed to bolstering the pipeline, and we're working aggressively to do that. And, actually, we would look at deals at all stages of development from pre-clinical through phase 3.
CFO Paul Clancy noted that it was a "tale of two cities" for Tecfidera growth: "In the United States, the lion's share -- from a change year-over-year basis -- is price, and is pretty stable unit trends on Tecfidera."
Outside the U.S., Clancy noted, it's a different story: "We are not seeing any pricing on a year-over-year basis, and all of the gains are attributable to volume and unit expansion."
Looking forward
With a solid quarter in the books, management increased 2016 revenue guidance slightly and now expects revenue to fall in the range of $11.2 billion to $11.4 billion. Previous top-line guidance was for $11.1 million to $11.3 million.
On the bottom line, management took a more aggressive bump in adjusted earnings per share guidance and now expects EPS between $19.70 and $20, up from previous guidance of $18.30 to $18.60.
Biogen and AbbVie plan to launch Zinbryta next month, but Clancy said the revenue contribution this year would be "modest." AbbVie gained its rights to half the drug after outbidding Biogen for Biogen's partner Facet Biotech. That was six years ago, so hopefully the duo has buried the hatchet by now.
