Biogen Inc. (BIIB) Down 2.3% Since Last Earnings Report: Can It Rebound?

·8-min read

A month has gone by since the last earnings report for Biogen Inc. (BIIB). Shares have lost about 2.3% in that time frame, outperforming the S&P 500.

Will the recent negative trend continue leading up to its next earnings release, or is Biogen Inc. due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.

Q4 Earnings & Sales Beat

Biogen reported fourth-quarter 2022 adjusted earnings per share (EPS) of $4.05, beating the Zacks Consensus Estimate of $3.51. Earnings rose 19% year over year, driven by lower costs.

Sales came in at $2.54 billion, down 7% on a reported basis (4% on a constant-currency basis) from the year-ago quarter, hurt by lower sales of Tecfidera. However, sales of Spinraza improved in the quarter. Sales beat the Zacks Consensus Estimate and our estimate of $2.44 billion and $2.43 billion, respectively.

Product sales in the quarter were $1.91 billion, down 13% year over year. Revenues from anti-CD20 therapeutic programs rose 8% from the year-ago period to $448 million. The revenues include royalties on sales of Roche’s Ocrevus and Biogen’s share of Roche’s drugs, Rituxan and Gazyva. Revenues from Ocrevus royalties increased 19%, partially offset by a 14% decline in revenues from profit share on Rituxan due to biosimilar competition. Contract manufacturing and royalty revenues rose 52% in the quarter to $192.0 million.

Multiple Sclerosis Revenues

Biogen’s MS revenues were $1.27 billion in the reporter quarter, down 17% on a reported basis and 14% on a constant currency basis year over year.

Tecfidera sales declined 39% to $297.1 million as multiple generic versions of the drug have been launched in the United States and new generic launches are ongoing in several EU countries. Tecfidera sales were better than our model estimate of $249.5 million as well as the Zacks Consensus Estimate of $291 million.

U.S. Tecfidera revenues declined 45.5% to $87.4 million. Outside U.S. revenues fell 35.7% to $209.7 million, hurt by generic competition in some markets. Biogen is seeing new generic launches in several EU countries.

Biogen was granted an additional patent in the EU for Tecfidera, which is expected to expire in 2028. Biogen is filing actions to enforce this patent. It obtained preliminary injunctions in some countries to prevent generic entry. Generics continue to be sold in markets where preliminary injunctions are not in place.

Vumerity recorded $150.8 million in sales, up 20.7%. Vumerity sales were lower than the Zacks Consensus Estimate of $153 million.

Regarding supply constraints for Vumerity, Biogen said it has resolved the previously reported manufacturing issues at its contract manufacturer and is also working to get regulatory approvals for a secondary source of supply. Biogen does not expect a supply shortage in 2023.

Total Fumarates (Tecfidera + Vumerity) revenues were $447.9 million in the quarter, down 26.7% year over year.

Tysabri sales declined 4.7% year over year to $488.4 million, which missed the Zacks Consensus Estimate of $504 million.

In 2023, Tecfidera revenues are expected to continue to decline as a result of increasing generic competition. Biogen expects increased sales volumes of Vumerity in 2023 compared with 2022, mostly driven by demand growth. Tysabri revenues are expected to be flat in 2023 compared with 2022 despite increased competitive pressure and price reductions in certain European markets. A potential biosimilar of Tysabri may be launched in the United States and European markets as early as 2023.

Combined interferon revenues (Avonex and Plegridy) in the quarter were $309.6 million, down 17.9%, hurt by a continued shift from the injectable platform to oral or high-efficacy therapies.

Other Products

Sales of Spinraza rose 4% on a reported basis and 10% on a constant currency basis to $459.0 million. Spinraza sales were better than the Zacks Consensus Estimate of $427 million.

Spinraza’s U.S. sales rose 5% year over year. Biogen said it is seeing some signs of stabilization in patient use in the United States.

In ex-U.S. markets, Spinraza sales rose 4% at actual currency and 12% at constant currency due to volume growth in certain Asian markets, partially offset by increased competition in Europe.

In 2023, Spinraza’s sales growth is expected to be relatively flat from the 2022 level. Moderate growth in the United States and the emerging markets is expected to be offset by the impact of increased competition and loading dose dynamics as patients transition to dosing once every four months.

In the quarter, biosimilars revenues decreased 21% year over year (15% in constant currency) to $175 million due to pricing pressure and some net pricing adjustments in the quarter. Biogen announced with its fourth-quarter results that it is considering strategic options for its biosimilars business.

Biosimilars revenues are expected to be modest in 2023 as continued launch of Byooviz is expected to make up for pricing pressure in certain markets.

Alzheimer’s drug, Aduhelm recorded sales of $0.3 million in the fourth quarter, compared with $1.6 million in the previous quarter. Fumaderm sales were $1.8 million, down 33.3% year over year.

Research and development expenses were $602.0 million, down 14% year over year. Adjusted selling, general and administrative expenses declined 19% year over year to $632.0 million due to the company’s cost-savings initiatives.

Biogen repurchased 3.6 million shares worth $70 million in 2022. No shares were repurchased in the fourth quarter of 2022. Biogen had $2.05 billion remaining under its share buyback plan of $5 billion, which was authorized in October 2020.

2022 Results

For 2022, Biogen generated revenues of $10.17 billion, down 7% year over year on a reported basis and 5% on a constant-currency basis. Revenues beat the Zacks Consensus Estimate of $10.07 billion and came ahead of the guidance range of $10.0 to $10.15 billion.

Earnings were $17.67 per share, down 8% year over year. Earnings beat the Zacks Consensus Estimate of $17.13 and exceeded the guidance range of $16.50 to $17.15.

2023 Guidance Issued

The company issued fresh earnings and sales guidance for 2023.

Total revenues are expected to decline at a mid-single-digit percentage in 2023 from the 2022 level.

Biogen expects Leqembi to generate “modest in-market revenue” in 2023 though costs to market the drug will exceed revenues. The drug is not expected to contribute much to revenues until the CMS grants reimbursement for the drug under Medicare plans. This is expected to happen once Leqembi gets traditional approval. Accordingly, Leqembi will represent a negative headwind to revenues in 2023.

In October, the advocate general of the European Court of Justice issued a non-binding advisory opinion. Biogen expects Tecfidera to have statutory market protection in Europe until at least February 2024, if the court adopts the advisory opinion. The guidance assumes a favorable decision by the European Court of Justice relating to generic entry for Tecfidera in Europe.

Adjusted earnings are expected in the range of $15.00 to $16.00 per share.

Biogen expects R&D costs to increase by approximately $100 million in 2023 as it will no longer be sharing Aduhelm R&D costs with Eisai. Overall, operating expenses are expected to increase in 2023 due to investments to support potential news launches (Leqembi and zuranolone).

First-Quarter 2023 Outlook

The first quarter is a seasonally weaker quarter compared with the fourth quarter for the U.S. MS business due to channel dynamics and the higher discounts and allowances. The fourth quarter of 2022 benefited from the favorable timing of some shipments of Spinraza, which is expected to reverse in the first quarter of 2023. Operating expenses are also expected to be higher earlier in the year.

How Have Estimates Been Moving Since Then?

In the past month, investors have witnessed a downward trend in estimates review.

The consensus estimate has shifted -17.98% due to these changes.

VGM Scores

Currently, Biogen Inc. has a poor Growth Score of F, a grade with the same score on the momentum front. However, the stock was allocated a grade of B on the value side, putting it in the top 40% for this investment strategy.

Overall, the stock has an aggregate VGM Score of D. If you aren't focused on one strategy, this score is the one you should be interested in.


Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Biogen Inc. has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.

Performance of an Industry Player

Biogen Inc. is part of the Zacks Medical - Biomedical and Genetics industry. Over the past month, Vertex Pharmaceuticals (VRTX), a stock from the same industry, has gained 2.9%. The company reported its results for the quarter ended December 2022 more than a month ago.

Vertex reported revenues of $2.3 billion in the last reported quarter, representing a year-over-year change of +11.1%. EPS of $3.76 for the same period compares with $3.37 a year ago.

For the current quarter, Vertex is expected to post earnings of $3.10 per share, indicating a change of -11.9% from the year-ago quarter. The Zacks Consensus Estimate has changed -0.7% over the last 30 days.

The overall direction and magnitude of estimate revisions translate into a Zacks Rank #3 (Hold) for Vertex. Also, the stock has a VGM Score of C.

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