Biogen cost cuts drive profit beat, as Alzheimer's drug off to slow start
By Manas Mishra and Sriparna Roy
(Reuters) -Biogen reported a quarterly profit that topped Wall Street estimates, helped by cost cutting, as the launch of its new Alzheimer's disease drug remained sluggish.
Sales of Alzheimer's drug Leqembi, recorded by Japanese partner Eisai, were just $19 million for the quarter, compared to analysts' tempered expectations of between $13 million and $30 million.
However, the cost cutting measures contributed to a profit that exceeded analysts' expectations by 22 cents and Biogen shares were up nearly 5%.
"Overall, the quarter looks OK," Mizuho analyst Salim Syed said in a note, "with controlled expense management driving an EPS beat, and 2024 guidance reaffirmed."
Eisai had previously indicated it would not meet its previously set target to treat 10,000 patients by March.
The number of patients on the drug has increased nearly 2.5 times from roughly 2,000 patients at the end of 2023, Biogen said.
The growth in patients needs to accelerate from here, Jefferies analyst Michael Yee said.
Leqembi has been "an extraordinarily difficult launch", CEO Christopher Viehbacher acknowledged during conference call to discuss the results.
Bottlenecks due to Leqembi's requirements such as additional diagnostic tests, twice-monthly infusions and regular brain scans have contributed to a slower adoption of the drug than markets were expecting.
"While I do think expectations were quite low, Leqembi's launch continues to struggle," said David Song, investment partner at Tema ETFs, which includes Biogen in its Neuroscience and Mental Health ETF. "It will take multiple quarters to have a full picture."
The launch has led to profound changes in how doctors treat Alzheimer's patients, and challenges include the "amount of effort it takes to actually be able to initiate even the first patient," Viehbacher said in an interview.
"I do think we're now on a positive track. I think we're seeing momentum," he said.
Leqembi is among the newer drugs Biogen is counting on to drive growth for the next few years, as its multiple sclerosis therapies and spinal muscular atrophy treatment grapple with increased competition.
The Boston-based biotech said it has not yet received an acceptable offer for its biosimilars business and will continue to explore all options, including retaining the unit.
Sales of Biogen's multiple sclerosis drug Tecfidera came in at $254.3 million, above estimates of $236.84 million, but spinal muscular atrophy drug Spinraza missed estimates.
Skyclarys, the drug Biogen gained through its $6.5 billion Reata acquisition, had sales of $78 million, above estimates of $72.3 million.
"We've clearly still got a lot of work to do, but I think it feels like we're turning the corner in the company," said Viehbacher.
Biogen maintained its full-year forecast of an adjusted profit of $15 to $16 per share and said it continued to expect flat revenue for 2024.
(Reporting by Manas Mishra, Sriparna Roy and Vaibhav Sadhamta in Bengaluru; Editing by Devika Syamnath)
