By Biogen, a leading biotech company, recently reported financial results for the fourth quarter of 2023 that fell well below expectations. As a result, the share price dropped by 4.9% in morning trading. The company’s forecasts for 2024 also fell short of analyst predictions, further exacerbating concerns among investors.
One of the primary factors contributing to Biogen’s ongoing struggles is the failure of its Alzheimer’s disease medication, Aduhelm. While the treatment received accelerated approval from the Food and Drug Administration in mid-2021, Medicare refused to cover it in almost all cases, effectively dooming the drug.
Unfortunate timing has led to an unsustainable decline in revenue for Biogen. The company had heavily relied on Aduhelm to offset declining sales of its aging portfolio of multiple sclerosis drugs. Without the Alzheimer’s drug, their financial performance has been in free fall.
In 2023, Biogen’s non-GAAP diluted earnings amounted to $14.72 per share, less than half of what they earned in 2020 ($33.57 per share). Additionally, full-year revenue amounted to $9.8 billion, a significant decline from $13.4 billion in 2020.
Since the approval of Aduhelm, Biogen’s shares have plummeted by nearly 40%, reflecting investors’ lack of confidence in the company’s outlook.
Despite these challenges, Christopher Viehbacher, Biogen’s new CEO, remains optimistic about the company’s future prospects. Viehbacher stated on Tuesday that Biogen is “well positioned to return to sustainable growth.”
However, the recent financial results fell short of expectations, casting doubt on the extent of the anticipated growth promised by Viehbacher. For the fourth quarter, non-GAAP diluted earnings were $2.95 per share, missing the consensus estimate of $3.18. Biogen attributed part of this earnings figure to a $0.35 charge related to the discontinuation of Aduhelm’s development, which was disclosed in late January.
Furthermore, revenue for the quarter amounted to $2.4 billion, falling short of the consensus estimate of $2.5 billion.
Biogen now faces an uphill battle to regain stability and overcome the setbacks caused by the failure of Aduhelm. The company’s ability to rebound will depend on implementing strategic measures under the leadership of Christopher Viehbacher and finding new avenues for revenue growth in a highly competitive market.
Biogen’s 2024 Earnings Forecast Falls Short of Analysts’ Expectations
Biogen, a leading biotechnology company, recently announced its earnings forecast for 2024, which disappointed analysts. While this forecast signals the first earnings growth since 2020, it fell short of expectations. The company projected earnings between $15 and $16 per share, with the midpoint at $15.50. However, analysts had anticipated a higher value of $15.80 based on the current FactSet consensus call.
Moreover, Biogen expects a decline in revenue, projecting a low-to-mid-single digit percentage decrease. Analysts had initially predicted a slight decline of 1.3% to $9.7 billion for 2024.
This lackluster guidance has prompted Jefferies analyst Michael Yee to suggest that it could serve as a “slight clearing event” for the stock. Yee also expressed that the consensus numbers would likely need adjustment following this announcement.
The latest results highlight the decreasing sales of Biogen’s core products. Their revenue from multiple sclerosis drugs was $1.2 billion for the quarter, reflecting an 8% decline compared to the same period last year. The full-year sales for these drugs in 2022 amounted to $4.7 billion, representing a 14% decline.
Additionally, Biogen reported $7 million in sales for Leqembi, a new Alzheimer’s medicine developed in collaboration with Eisai. However, it should be noted that this revenue is recorded by Eisai, who reported it separately last week. Biogen receives half of the revenue generated by Leqembi.
Sales of another newly launched drug, Zurzuvae, which is a treatment for postpartum depression developed in partnership with Sage Therapeutics, reached $2 million in the quarter. Biogen’s newly-launched treatment for Friedreich’s ataxia, Skyclarys, fell short of expectations with sales totaling $56 million, below the $61 million estimate from FactSet.
Overall, this has been a challenging year for Biogen, as their shares have experienced a 10% decline, with prices trading at $232.82 early Tuesday in 2024.
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