Biogen posts Q4 sales miss, issues 'conservative' 2017 guidance

Biogen
Biogen reported 2016 sales of $11.4 billion, a 6% increase from its $10.8 billion the previous year.

With Tecfidera sales under pressure, Biogen reported mixed Q4 results that saw it beat forecasts on earnings but miss on revenue. The drugmaker is guiding for a slower-than-expected 2017, with the costly new spinal muscular atrophy drug Spinraza set to play an important role going forward.

In the fourth quarter, Biogen’s total revenue missed consensus estimates by $66 million. While Tecfidera sales were up 1% to $1 billion, they missed Street guidance by $6 million, as did interferons by $15 million and Tysabri by $34 million. Alprolix and Eloctate each beat consensus sales estimates.

Even though revenues fell short of expectations, the company’s Q4 non-GAAP EPS of $5.04 beat estimates due to lower R&D spending and reduced SG&A expenses.

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Next year, Biogen is guiding for revenue of $11.1 billion to $11.4 billion and non-GAAP EPS of $20.45 to $21.25. It’s important to note the guidance only includes one month of sales from the company’s hemophilia franchise, which Biogen will spin off as Bioverativ on Feb. 1.

The revenue and EPS guidance both come below consensus estimates, with Barclays describing the numbers as “initially conservative but not as bad as feared when excluding hemophilia.”

Those hemophilia meds, the analysts wrote, performed “better than expected" in the just-released results. On the year, Eloctate grew 61% to $513 million; while Alprolix grew 42% to $334 million.

With a headline-grabbing price of $750,000 for the first year, Spinraza will be the "big wobble" for the coming year, Bernstein analyst Ronny Gal wrote in a note. "If there is a beat and raise this year it will come" from that drug, he added. Spinraza achieved $5 million in Q4 sales after its late-December launch.

All told, the company reported 2016 revenues of $11.4 billion, a 6% increase from its $10.8 billion the previous year.

For 2016, total sales of key MS med Tecfidera increased 9% to nearly $4 billion, while Tysabri and Plegridy also posted an increase on the year. The company suffered from a downturn in interferon sales around the world and from decreased Avonex revenues, which fell 12% to $2.3 billion.

In a series of Thursday notes, several analysts said the results were “fine,” “decent,” and “OK,” with some mixed on whether investors would send shares up or down. As of midmorning Thursday, Biogen’s shares were up about 3.6%.

Last year, Biogen conducted a CEO transition after George Scangos announced in July he’d be stepping down. The Big Biotech appointed former chief commercial officer Michel Vounatsos to the role in December.

The company eliminated 800 positions back in 2015 to save $250 million in operating expenses; it planned to reinvest the money to support Tecfidera sales and marketing.

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