Two of Biogen's newest drugs, Leqembi and Skyclarys, walloped first-quarter sales expectations on Wednesday. Biogen stock jumped in morning trades.
Leqembi, the Alzheimer's drug Biogen developed with Eisai, generated $19 million in sales in the first quarter — nearly triple what it brought in during the fourth quarter. Analysts projected just $11 million in revenue from the amyloid-busting drug. Biogen described the launch as going at a "steady pace."
Skyclarys sales came in at $78 million, beating forecasts for $69 million. Biogen got Skyclarys in the $7.3 billion takeover of Reata Pharmaceuticals last year. Skyclarys won marketing approval in Europe during the first quarter.
Biogen stock hit a fresh high at 319.76 last June, but has lost nearly 40% of its value since then.
RBC Capital Markets analyst Brian Abrahams kept his outperform rating and 326 price target on Biogen shares. On today's stock market, Biogen stock popped 4.6% to 201.99.
"Some encouraging signs of life for the launch products," he said in a client note. "While the base business continues to compress and more material contribution from the newer components may be needed to fully reignite enthusiasm, with little enthusiasm baked in and good long-term growth still looking likely in our view, we remain bullish on shares."
Biogen Stock: Leqembi Inflection?
Leqembi is experiencing "improving growth," RBC's Abrahams said. Biogen reported a two-and-a-half-fold increase in patients over the fourth quarter. A fifth of those were added in March alone. The number of prescribers has also doubled since the December quarter.
PET scan reimbursement and getting appointments with neurologists "remain bottlenecks" for patients. But doctor feedback suggests major centers are starting to infuse Leqembi, Abrahams said. Still, Evercore ISI analyst Umer Raffat says Leqembi has a long way to go. Raffat reiterated his outperform rating on Biogen stock.
"But does that mean Biogen may continue to hit Leqembi consensus numbers for the balance of the year?" he asked in a report. "Quite likely."
The next big catalyst will be when Biogen files for Food and Drug Administration approval of an under-the-skin injection of Leqembi. Wedbush analyst Laura Chico says this will be "a critical element to facilitate uptake." Currently, patients must travel to infusion centers to receive the drug. An under-the-skin shot — or subcutaneous — can be delivered at home.
She kept her neutral rating and 213 price target on Biogen stock.
"Overall, the turnaround story continues and while cost reductions are headed in the right direction, additional growth drivers are likely needed," she said in a report.
Skyclarys Solid, But Spinraza Lags
Meanwhile, Skyclarys sales appeared solid, Chico said.
There are now more than 1,100 patients in the U.S. on the drug, RBC's Abrahams said. That's 24% of the market for Friedreich's ataxia, an inherited disease that slowly damages the spinal cord, peripheral nerves and cerebellum in the brain.
"We believe this helps reassure that the long-term (return on investment) for the Reata acquisition should be favorable," Abrahams said.
Also promisingly, sales of postpartum depression treatment Zurzuvae beat expectations. Biogen reported $12 million in sales — double what analysts expected, said Chico, the Wedbush analyst. That helped prod shares of partner Sage Therapeutics up 8.1% to 14.
Sage reports its earnings on Thursday.
On a bearish note for Biogen stock, sales of spinal muscular atrophy drug Spinraza came in well below expectations at $341.3 million. Analysts projected a stronger $415 million in sales. Spinraza sales plunged 23% year over year, and only grew 1% in the U.S. due to the timing of shipments and growing competition.
"We believe it may take a few more quarters to get a better sense of the drug's overall trajectory and whether Biogen can indeed effectively stabilize that franchise," RBC's Abrahams said.
Sales Decline And Miss
Across all products, Biogen's sales declined 7% to $2.29 billion. That narrowly missed forecasts for $2.31 billion, according to FactSet. Piper Sandler analyst Christopher Raymond earlier projected a lower $2.24 billion.
Adjusted earnings, on the other hand, rose 8% to $3.67 a share and topped estimates for $3.45. Raymond also predicted a lower $3.35 earnings per share.
Much of the sales slowdown was due to multiple sclerosis treatments. Sales of Tecfidera slumped almost 7.5% to $254.3 million, though that beat Biogen stock analysts' expectations for $239 million. Tysabri sales fell nearly 9%, hitting $431.3 million. But that still topped calls for $430 million, according to FactSet.
Overall, Biogen's MS drugs brought in $1.08 billion in sales, narrowly ahead of forecasts for $1.07 billion. Sales slipped more than 4%.
Biogen kept its outlook for the year. The company expects adjusted earnings of $15 to $16 a share — up 5% at the midpoint vs. last year. Biogen also calls for sales to decline by a low- to mid-single digit percentage. Core pharma sales, which includes Leqembi, are projected to be flat.
The outlook is in line with Biogen stock analysts' projections for adjusted income of $15.49 per share and $9.47 billion in sales. Sales would fall almost 4%.
Follow Allison Gatlin on X, the platform formerly known as Twitter, at @IBD_AGatlin.
