Q3 Spinraza math confounds analysts as Biogen beats on both lines

Biogen's Spinraza generated $271 million in the third quarter.

Spinraza took center stage on Biogen’s third-quarter earnings callin part because analysts couldn’t square their math on sales of the spinal muscular atrophy med.

The big biotech’s U.S. Spinraza revenues of $198 million just barely edged the second quarter’s $195 million haul, painting a picture of flat growth. But management’s assertion that the med had 75% more new patients at the end of the third quarter than it did at the end of the secondand that 10% of patients in the third quarter were on maintenance dosinghad analysts scratching their heads, and no fewer than three of them asked for clarification on the call.

The way Mizuho’s Salim Syed sees it, they never got it, with executives failing to provide “enough detail to square flattish revenue growth” versus the second quarter. Others, such as Jefferies’ Michael Yee, said the set of stats Biogen gave “does generally jibe with our model."

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As Bernstein’s Ronny Gal figures, “we think new starts are flat, but patient number is growing,” he wrote, adding that “the number of new adds is likely to be fairly stable.” His estimates tally about 185 U.S. patients per month at an average cost-per-dose of about $90,000.

Regardless, executives assured analysts they should expect some U.S. Spinraza growth going forward, though the majority will come outside Biogen’s home country. Ex-U.S. sales already look good thanks to strong performances for the med in Germany and Turkey; Spinraza generated worldwide sales of $271 million, beating consensus estimates by 12% and pushing total revenue to $3.08 billion, which slightly topped $3.04 billion expectations.

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On the profit side, though, is where Biogen really surprised. It posted non-GAAP earnings per share of $6.31, trouncing consensus estimates of $5.67 on the back of reduced royalty payments and lower-than-expected cost of goods sold and operating expenses.

“Overall, a decent quarter,” Syed wrote, with Yee adding that “consensus EPS likely needs to go up.”