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Biogen Beats Second-Quarter Expectations

By Cory Renauer – Jul 22, 2020 at 2:20PM

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The biotech, which specializes in treating neurological diseases, may have topped estimates, but its stock barely moved.

Shares of Biogen (BIIB 1.46%) hardly moved following the release of second-quarter earnings results that beat Wall Street's expectations on the top and bottom lines.  

Revenue rose 1.7% year over year to $3.7 billion, exceeding the average analyst estimate by $240 million. Adjusted earnings rose 12% to $10.26 per share, $2.25 per share higher than expected.

A doctor holding a dollar sign.

Image source: Getty Images.

Despite that outperformance, the stock was close to flat in mid-afternoon trading Wednesday, down 0.3% as of 2:15 p.m. EDT, because investors aren't expecting double-digit-percentage earnings growth to continue much longer. Sales of the company's multiple sclerosis drugs still provide 58% of its revenue, and they fell a combined 3.5% year over year to $2.1 billion.

Biogen also receives royalties from Roche (RHHBY 0.68%) for sales of Ocrevus, a biannual injection that's putting pressure on sales of Biogen's multiple sclerosis therapies. Those royalties rose 14% to $208 million in the quarter, but they can't carry Biogen forward on their own.

Spinraza, a lifelong treatment for spinal muscular atrophy (SMA) was Biogen's lead growth driver before a once-and-done gene therapy from Novartis (NVS 1.16%) called Zolgensma became the second SMA treatment to earn approval last year. In the second quarter, sales of Spinraza rose just 1% to $495 million.

Earlier this month, Biogen submitted an application to the FDA for its experimental Alzheimer's disease treatment, aducanumab. As potentially the first disease-modifying therapy for Alzheimer's disease, sales of aducanumab could solve all of Biogen's problems, but its approval is far from guaranteed.

Cory Renauer has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Biogen. The Motley Fool has a disclosure policy.

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