Fourth Quarter 2023 Financial Results

On Tuesday, Biogen Inc (BIIB) reported sales of $2.39 billion for the fourth quarter of 2023. However, this figure missed the consensus estimate of $2.46 billion, representing a 6% year-over-year decrease and a 5% decrease at constant currency (CC).

Additionally, the company’s adjusted EPS stood at $2.95, down 27% from the previous year, and fell short of the consensus of $3.18.

Eisai Co Ltd (ESALY), Biogen’s partner, encountered challenges in reaching the 10,000-patient milestone for Leqembi, despite strong demand.

As of January 26, Eisai disclosed that only 2,000 patients were on treatment, with an estimated four times as many on a waiting list.

Notably, Biogen has stepped in to support Eisai’s U.S. promotional efforts, with plans to expand the U.S. field force by about 30%.

Challenges and Analyst’s Outlook

The slow launch of Leqembi has limited stock growth for Biogen, and uncertainties persist about a meaningful launch in 2024.

Baird analyst has lowered the price target to $316 from $333 with an Outperform rating. The analyst acknowledges that Biogen’s Spinraza remains an effective drug but faces stiff competition from Novartis AG’s (NVS) Zolgensma and Roche Holding AG’s (GENENTECH) Evrysdi in treating Spinal Muscular Atrophy.

The simultaneous introduction of three powerful therapies is expected to intensify the competitive landscape. Despite these challenges, the outlook for Spinraza appears positive, with expectations to contribute significantly to revenue in the coming decade.

Biogen’s Strategic Response

Amid concerns over maturing franchises impacting large caps, Biogen is looking to address potential revenue shortfalls through acquisitions. The company is considering engaging in $1 billion-$2 billion deals to acquire products that could significantly impact investors. Potential options in the CNS space may meet this criteria.

Price Action: BIIB shares are down 2.07% at $221.95 on the last check Wednesday.