Biogen will start its "life after Aduhelm" with a restructuring and, soon, a new chief executive, an analyst said Tuesday as Biogen stock slipped.
Following a Centers for Medicare and Medicaid Services decision to restrict coverage of the embattled Alzheimer's treatment, Biogen said it will "substantially eliminate" commercial efforts for Aduhelm. Further, CEO Michel Vounatsos will soon step down. A search for the new CEO is underway. Vounatsos will stay in his role in the meantime.
Another analyst called the first quarter a "pivot point" for Biogen.
"Though (its) go-forward strategy remains somewhat vague and dependent on (study) readouts and likely incoming management, we believe these changes will be well received over the long term, and give the company a fresh start in refocusing (research and development) priorities and rightsizing operating expenses," RBC Capital Markets analyst Brian Abrahams said in a report to clients.
On today's stock market, Biogen stock rose but retreated to end the day at 205.70, down 0.8%.
Biogen Stock: Eliminating Aduhelm
During the first quarter, Aduhelm generated $2.8 million in sales. Biogen plans to eliminate its commercial infrastructure for Aduhelm, leading to an additional $500 million in annual savings.
"This does not mean an elimination of efforts in Alzheimer's," Wedbush analyst Laura Chico said in her note to clients. "The company continues to look towards lecanemab data in the fall of 2022. For our part, we hold a cautious outlook on this event."
Lecanemab is another experimental Eisai-partnered Alzheimer's treatment. Biogen and Eisai will have late-stage test data later this year. Chico kept her neutral rating on Biogen stock.
Overall First Quarter Beat
Overall, first-quarter sales declined 6% to $2.53 billion. Sales of multiple sclerosis drugs dipped 3% to $1.65 billion. Spinraza, a spinal muscular atrophy drug, generated $473 million, down 9%. Revenue from biosimilars, lower-cost knockoffs of biologic drugs, fell 5% to $194 million.
Despite the declines, several key products beat expectations. Worldwide sales of Biogen's biggest multiple sclerosis treatment, Tecfidera, topped forecasts. Spinraza and sales of fellow MS drug, Tysabri, also came in above projections, Wedbush's Chico said.
But adjusted earnings per share came in well below forecasts at $3.62. Biogen noted Aduhelm inventory write-offs led to a 76-cent hit. Adjusted earnings tumbled more than 32%. Biogen stock analysts projected $4.34.
For the year, Biogen reaffirmed its outlook for adjusted profit of $14.25-$16 per share. The midpoint of guidance lagged Biogen stock analysts' call for $15.48. The company expects $9.7 billion to $10 billion in sales, relatively in line with projections for $9.86 billion.
Follow Allison Gatlin on Twitter at @IBD_AGatlin.
