Still reeling from aducanumab flop, Biogen executives lay their cards on the table

biogen
Biogen is seeking to regroup after a high-profile trial failure in Alzheimer's disease. (Biogen)

When drugmakers report their quarterly numbers, executives like to accentuate the positive. But sometimes, calamity forces them to do the opposite.

Biogen's top brass squared up to that task Wednesday, in the wake of a spectacular phase 3 failure for aducanumab, its closely watched late-stage Alzheimer’s candidate. But that drug's demise wasn't the only problem executives hashed out during their first-quarter earnings call.

The multiple sclerosis med Tecfidera—Biogen’s top drug by sales—faces numerous intellectual property challenges, and its MS franchise as a whole fell short for the quarter. The company's up-and-comer Spinraza, a fast-growing treatment for spinal muscular atrophy, faces impending competition from Novartis' gene therapy Zolgensma. And though Biogen generated $3.5 billion in Q1 revenue, up 11% year-over-year, analysts on Wednesday’s call were less interested in its financial performance than in its pipeline and strategy looking forward. 

Biogen has the “opportunity and obligation” to rebound, CEO Michel Vounatsos assured the analysts and reminded them that the company will continue buying back shares to keep investors interested in the meantime. After the aducanumab flop cratered the stock, Biogen announced a $5 billion buyback plan.

That'll leave less money for M&A, but Biogen does plan to continue scouting for deals in its focus areas, Vounatsos said, following up on comments at the J.P. Morgan Healthcare Conference in January.

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RELATED: Where can Biogen turn after mammoth Alzheimer's blow? The M&A table, analysts say 

Meanwhile, multiple threats loom over Biogen's big-selling MS med Tecfidera, which chipped in $999 million in the first quarter. The U.S. Patent and Trademark Office plans to review its patents, while the company defends its IP in federal court. Meanwhile, Vountasos said, Biogen should have the chance to launch Vumerity, a follow-up oral MS med up for an FDA decision by year's end. Bernstein analysts have said the drug could generate $734 million by 2022 as Tecfidera sales sink.

Then there's fast-launching Spinraza, the company’s pricey spinal muscular atrophy med, which has trounced expectations so far. It pulled in $518 million for the quarter, but Novartis' AveXis unit is expected to roll out its rival, Zolgensma, later this year, and market-watchers worry how Spinraza will fare.

After all, as a gene therapy, Zolgensma is designed as a one-time cure. But as pricey as Spinraza is—$750,000 for the first year and $375,000 annually after that—Zolgensma will be far more expensive as a lump sum, with prospective price tags that range from $2 million to $4 million and beyond. And Biogen execs said they believe Spinraza will “remain the standard of care for years to come.” 

Biogen has doubled down on biosimilars as competitive threats mount elsewhere; last year it opted to boost its investment in BioEpis, its biosim-focused joint venture with Samsung. And for Q1, Biogen's biosims pulled in $175 million, partly in thanks to its BioEpis-partnered Humira copycat Imraldi, which is the top biosim to that med by market share in Europe after launching in October.

Looking ahead, Biogen aims to keep advancing its pipeline and scouting new drug candidates, execs said Wednesday. The company now focuses on multiple sclerosis, SMA and biosims, but it's planning to advance into ophthalmology, movement disorders, neuromuscular diseases, stroke and more in the 2020s, the company said in an investor presentation. It's still fanning its ambitions in pain, Alzheimer’s and neurocognitive disorders as well.

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