Biogen CEO George Scangos is going out on an up note. The biotech, which today reported street-beating Q2 results, said he is stepping down as soon as a successor is named, leading some investors to wonder if his departure suggests the company it will put itself in play.
The Cambridge, MA, biotech reported that revenue of $2.9 billion was up 12% and net income of $1 billion was up 13% on strong sales in its multiple sclerosis and hemophilia drugs. Sales of hemophilia drugs Eloctate and Alprolix were up 68% and 48% respectively. Sales of MS drug Tecfidera, which was struggling last year, were up 12%, in line with analysts’ expectations.
Earnings of $5.21 a share were up 23%. The company significantly updated its earnings guidance, from a range of $18.30 to $18.60 a share to $19.70 to $20.00 a share. The results followed a strong first quarter.
In a call with investors, Scangos said he will step down in the next few months. “The board and I recognized this is an excellent time for transition. The company is doing well,” Scangos said. “The commercial and R&D activities are doing well and we're adding to the pipeline through internal and external opportunities, so good time for a new CEO to take the helm and see Biogen through what I see as an exciting future.”
Exactly what that future will be is what some investors want to know, Evercore ISI analyst Mark Schoenebaum said in a quick note to clients today. “This morning we’ve already received several investor inquiries as to whether this might put the company in play,” he said without offering an answer.
Over the past year, as Biogen's MS star Tecfidera began to flag and shares suffered as a result, market-watchers have suggested the company as a Big Pharma takeover target. After Biogen unveiled disappointing Q2 results last July, Cowen & Co. put the drugmaker on its list of top three biopharma buyout prospects. Later, before Allergan inked its ill-fated merger with Pfizer, analysts suggested an Allergan-Biogen tie-up. And since then, analysts have suggested Biogen faced an "eat or be eaten" scenario.
There has been speculation for some time about where Biogen is, or should be, headed. The drugmaker last fall announced that it would eliminate 11% of its workforce, about 880 jobs, to save $250 million in annual operating expenses and plow the extra money into its "key commercial initiatives" after sales of star drug Tecfidera faltered. In recent months, the drugmaker has made changes in the management of both sales and research. It also faces patent challenges to both Tecfidera and Tysabri.
Speculators have looked for Biogen to do something in M&A, while others, such as Leerink analyst Geoffrey Porges, have said the company might be looking at selling its hemophilia portfolio, a business he said could raise about $5.9 billion for Biogen.
-here’s the earnings release
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