Biogen's turnaround is still a "work in progress," an analyst said Tuesday as Biogen stock slumped on light fourth-quarter profit due, in part, to its now defunct Alzheimer's drug, Aduhelm.
Total revenue also missed Wall Street's forecast. Sales of spinal muscular atrophy treatment Spinraza and Friedreich's ataxia drug Skyclarys also lagged expectations. Biogen now expects full-year sales to decline by a low- to mid-single digit percentage.
"The Biogen turnaround story remains a work in progress as fiscal year 2024 still appears to be a reset year," Wedbush analyst Laura Chico said in a client report.
In morning trading on today's stock market, Biogen stock skidded more than 5% to 231.62. Shares hit their lowest point since early December, MarketSmith.com shows.
Biogen Stock: Sales, Earnings Slide
Overall, fourth-quarter sales fell 6% to $2.39 billion, missing projections for $2.47 billion, according to FactSet.
Adjusted earnings plummeted 27% to $2.95 per share. Analysts expected a stronger $3.18 a share. Biogen noted it took a roughly 35-cent hit to profit after wrapping up the costs associated with Alzheimer's drug Aduhelm. Last month, Biogen scrapped all efforts tied to the controversial drug, which gained Food and Drug Administration approval but was largely denied Medicare coverage.
Meanwhile, Biogen is shifting its focus to Eisai-partnered Leqembi, another Alzheimer's treatment that uses the same mechanism as Aduhelm. But the Leqembi launch is slow. Eisai recently said just 2,000 patients were receiving treatment of the 10,000 patients it hopes to eventually win over.
Eisai said earlier this month reaching that 10,000 target will be "challenging," Wedbush's Chico said. She has a neutral rating on Biogen stock.
"The slow launch of Leqembi, with about 2,000 patients on drug, will provide small consolation for the once mega-blockbuster potential of this class," Citeline analyst Pamela Spicer said in an email to Investor's Business Daily.
Tecfidera Beats, But Guidance Is Weak
The brighter spot in Biogen's fourth-quarter report was its multiple sclerosis franchise, RBC Capital Markets analyst Brian Abrahams said in a report. Sales of Tecfidera came out to $244 million, beating his view for $232 million. Tysabri sales were $465 million, above Abrahams' call for $460 million.
"That said, we continue to closely watch the potential biosimilar Tysabri launch for any impact to the MS business," he said.
But Third Bridge analyst Lee Brown noted Tecfidera sales fell nearly 18% in the quarter due to generic competition in the U.S. Notably, the European Commission revoked marketing authorizations for generic Tecfidera knockoffs until Feb. 3, 2025. So, Tecfidera sales in Europe are protected for another year.
Revenue from rare disease products Spinraza and Skyclarys lagged forecasts. Spinraza brought in $412.6 million in sales, slumping 10%. Biogen stock analysts called for $455 million, Wedbush's Chico said. This was also Skyclarys' first full quarter under Biogen following the takeover of Reata Pharmaceuticals. But $56 million in Skyclarys sales missed views for $61 million.
For the year, Biogen guided to adjusted earnings of $15 to $16 per share. The midpoint of Biogen's guide missed calls for $15.81. The company also expects sales to fall by a low- to mid-single digit percentage vs. analysts' estimate for sales to decline 1.3% to $9.71 billion.
Mizuho Securities analyst Salim Syed says the guidance is "effectively weak," but Biogen could narrow its outlook through the year. He has a buy rating and 335 price target on Biogen stock.
Follow Allison Gatlin on X, the platform formerly known as Twitter, at @IBD_AGatlin.
