Biogen (BIIB -0.33%) continues to lean on sales growth of its spinal muscular atrophy drug, Spinraza, to drive revenue. While the overall double-digit revenue growth is nothing to scoff at, investors are rightfully focused on where future growth will come, especially after Biogen's Alzheimer's disease drug aducanumab failed a pair of phase 3 studies.

Biogen results: The raw numbers


Q1 2019

Q1 2018

Year-Over-Year Change


$3.49 billion

$3.13 billion


Income from operations

$1.50 billion

$1.53 billion


Earnings per share (EPS)




Adjusted EPS




Data source: Biogen.

What happened with Biogen this quarter?

  • Sales of multiple sclerosis drugs were down 2% year over year with sales of one of its older medications, Avonex, dropping 12%. Fortunately, some of those patients are going to Roche's Ocrevus, for which Biogen gets royalties. Adding those in, the multiple sclerosis franchise was flat year over year.
  • Sales of Spinraza, which Biogen developed with Ionis Pharmaceuticals (IONS 0.68%), were up 42% year over year, including a 19% jump in U.S. sales, although U.S. sales were down quarter over quarter. Management blamed the sequential drop on missed appointments due to weather and patients with colds or the flu. The conversion of patients from a loading dose, which generates more revenue, to a maintenance dose also added to the decline. In the first quarter in the U.S., approximately 75% of treatments were for maintenance doses, compared to approximately 65% in the fourth quarter. Outside the U.S., sales jumped 26% quarter over quarter thanks to new launches and a final reimbursement price in France that was adjusted upwards.
  • Sales of biosimilars increased 37% year over year and 12% quarter over quarter, thanks to the launch of Imraldi, a biosimilar to AbbVie's Humira.
  • Last month, Biogen announced plans to acquire genetic eye disease specialist Nightstar Therapeutics (NITE) for $877 million.
  • On the pipeline front, in addition to the aforementioned disappointing news on aducanumab, Biogen started the phase 3 Valor study of tofersen (BIIB067), which is also partnered with Ionis Pharmaceuticals. The drug treats patients with amyotrophic lateral sclerosis who have a mutation in superoxide dismutase 1 (SOD1).
  • In February, Biogen and partner Alkermes (ALKS 0.27%) submitted a marketing application for multiple sclerosis drug Vumerity, which is a variation of Biogen's Tecfidera.
  • Biogen announced a $5 billion share repurchase program on top of the $1 billion remaining on the previous repurchase program.
Doctor talking to a patient in front of a window

Image source: Getty Images.

What management had to say

CEO Michel Vounatsos talked about the share repurchase plan and balancing that with business development (BD), such as an acquisition:

We plan to deploy our capital to areas of highest returns for the shareholders and we do believe that at the current stock price level, buying back shares is very important. We took aggressive steps to diversify our portfolio in the past, but in the context of our current cash flow generation and the profile of our balance sheet, we can do both, buying back and also conduct some BD M&A activities.

Biogen CFO Jeffrey Capello noted that Spinraza still has room to grow sales further: "Our estimated epidemiology in the U.S. is still 9,000 patients, only 30% penetrated to date. And in the adult class, which is the largest class, 65% of the patients we're only 18% penetrated."

Looking forward

A decision from the Food and Drug Administration on Vumerity is scheduled to come in the fourth quarter of this year, but investors should see the drug as more of a defensive move, protecting Tecfidera, which may have patent issues, than an opportunity to add sales growth like Spinraza has done.

The next Spinraza will need to come from one of the other 22 clinical programs, including 10 that will have mid- to late-stage clinical readouts by the end of the 2020. Assuming the Nightstar deal goes through, the acquisition will add two more mid- to late-stage clinical assets.