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Biogen Tops Q4 Earnings, Provides Strong Outlook for 2015 - Analyst Blog

Zacks Equity Research
Updated

Biotech company, Biogen Idec (BIIB), reported fourth quarter 2014 earnings per share of $4.08 (including the impact of stock-based compensation expense), way above the Zacks Consensus Estimate of $3.74 and the year-ago earnings of $2.33 per share.

Biogen Idec Inc. - Quarterly EPS | FindTheBest

 

Fourth quarter 2014 revenues increased 34% to $2.64 billion, just shy of the Zacks Consensus Estimate of $2.65 billion.

Including one-time items, fourth quarter 2014 earnings increased 94% to $3.74 per share.

Full year earnings increased 54.5% to $13.78 per share. Revenues soared 40% to $9.7 billion.

The Quarter in Detail

Fourth quarter Tysabri revenues increased 25% to $484 million (U.S. - $266 million, ex-U.S. - $218 million) from the year-ago period. Sales declined 3.4% sequentially.

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Combined interferon revenues (Avonex and Plegridy), in the fourth quarter were $777 million (U.S. - $528 million, ex-U.S. - $249 million). Avonex revenues declined 2.1% to $736 million. Avonex U.S. sales included 14 shipping weeks in the fourth quarter, adding about $35 million to U.S. sales.

Plegridy contributed $41.1 million to fourth quarter revenues. While half of Plegridy scrips came from Avonex switches, the rest came from new patients and switches from other therapies.

Rituxan and Gazyva related revenues were $305 million in the fourth quarter.

Oral multiple sclerosis (MS) drug, Tecfidera, continues to perform well with sales coming in at $916 million – this included U.S. sales of $743 million and EU sales of $173 million. Sales were up 16.4% on a sequential basis. U.S. sales included 14 shipping weeks in the fourth quarter, which boosted U.S. sales for the reported quarter by about $50 million.

Biogen reported a moderation in new starts for Tecfidera in the fourth quarter. Several factors were responsible for this including a decline in the overall market switch rate. The U.S. label update in December following the reporting of a progressive multifocal leukoencephalopathy (PML)-related death of a patient on Tecfidera as well as the recent launch of Plegridy also affected growth. Plegridy has been capturing some interferon switches that would have otherwise gone to Tecfidera.

Biogen reported that Tecfidera is now the most prescribed MS therapy in Germany and the most prescribed oral therapy in the U.S.

Alprolix and Eloctate, Biogen’s recently launched hemophilia treatments, recorded revenues of $40 million and $37 million, respectively, showing growth from third quarter 2014 revenues of $25 million and $22 million, respectively.

Provides 2015 Outlook

Biogen provided guidance for 2015. The company expects earnings in the range of $16.60 - $17.00 per share on revenue growth of 14% - 16%. The Zacks Consensus Estimate of $16.67 per share is towards the lower end of the company’s guidance range.

Guidance includes the impact of lower royalty revenues due to the expiry of royalties on Angiomax sales. Moreover, Tecfidera will move to a lower price in Germany once the one-year free pricing ends in March. However, Tecfidera is expected to be the largest contributor to top-line growth in 2015.

The company expects R&D spend in the range of 19% - 20% of total revenues and SG&A spend of 20% - 21% of total revenues.

Our Take

Biogen's fourth quarter earnings were way above expectations yet again. Tecfidera should continue to perform well in the U.S. and EU. Biogen, which launched several new products in the last few months, remains poised for strong growth.

Biogen is a Zacks Rank #2 (Buy) stock. Some equally well-ranked stocks in the biotech sector include Alnylam Pharmaceuticals, Inc. (ALNY) and Achillion Pharmaceuticals, Inc. (ACHN). A better-ranked stock in the biotech sector is Celgene Corp. (CELG) with a Zacks Rank #1 (Strong Buy).


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