Biogen stock toppled within a profit-taking zone Tuesday despite a beat-and-raise earnings report and continued enthusiasm for its experimental Alzheimer's treatment.
During the third quarter, Biogen earned $4.77 per share, minus some items, on $2.51 billion in sales. Earnings matched the year-earlier quarter and easily topped forecasts for $4.13, according to FactSet. Sales sank 10% in constant currency, but were ahead of the $2.47 billion estimate.
Now, investors are watching for more from Biogen and partner Eisai on lecanemab, a potential disease-altering Alzheimer's treatment. Unlike most drugs on the market — with the exception of Biogen's own Aduhelm — lecanemab promises to change an underlying pathology of Alzheimer's, rather than simply target its symptoms. Next month, Eisai will present the results of a Phase 3 study of lecanemab.
"We continue to believe shares do not fully reflect the potential for lecanemab to drive a company turnaround, and expect upcoming Alzheimer's clinical, regulator and reimbursement developments to further de-risk perceptions and drive share upside," RBC Capital Markets analyst Brian Abrahams said in a report.
On today's stock market, Biogen stock dipped 0.4% to 273.56.
Biogen Stock Sinks On Mixed Product Sales
Notably, it wasn't a perfect quarter for Biogen. The biotech company's biggest product is now multiple sclerosis treatment Tysabri. Tysabri sales dipped 3.4% to $505.5 million last quarter and lagged forecasts for $515 million, according to multiple analysts' reports.
"Tysabri now accounts for the majority of Biogen's product revenue and reflects a strategic issue as the multiple sclerosis franchise remains under strong, competitive pressure," Wedbush analyst Laura Chico said in a report. "Bottom line, we remain on the sidelines as we await further strategic updates from the company."
Among those updates, investors are still waiting for news on Biogen's next chief executive. Current CEO Michel Vounatsos is resigning, but Biogen has yet to name his successor. Vounatsos' resignation comes after Biogen gained accelerated approval for an Alzheimer's drug, Aduhelm, but failed to gain traction in the commercial market after Medicare officials refused to cover it for most patients.
Biogen stock analysts hope lecanemab will be different. Like Aduhelm, it removes plaque in the brain known as beta amyloid. Beta amyloid is a hallmark of Alzheimer's disease. But it's unknown if it's also the cause. In a final-phase study, patients given lecanemab had a 27% slower decline in cognition vs. placebo recipients.
Biogen and Eisai are expected to seek traditional approvals in the U.S., Europe and Japan by the end of the first quarter, Chico said. This could help persuade Medicare officials to reimburse the drug's costs.
Biogen Raises 2022 Outlook
Other areas of Biogen's report were mixed. Tecfidera, its former multiple sclerosis leader, brought in $339 million and beat expectations for $319 million, analysts said. Tecfidera is facing heavy competition from cheaper generic rivals.
Spinraza sales sank almost 3% to $431.1 million. But sales of the spinal muscular atrophy drug came in ahead of expectations for $415 million, analysts said.
Revenue from Biogen's biosimilars — generic versions of biologic drugs — were short at $188 million.
"Biosimilars revenue decreased 7% at actual currency and 4% at constant currency vs. prior year," Mizuho Securities analyst Salim Syed said in a note. "Volume increases were more than offset by unfavorable pricing, negative currency impacts and pricing pressure."
Still, he kept his buy rating and 270 price target on Biogen stock.
Biogen raised its guidance for the year. Now, the company expects adjusted earnings of $16.50-$17.15 per share and $10 billion to $10.15 billion in sales. Biogen stock analysts forecast $16.50 in per-share earnings and $10.01 billion in sales.
Follow Allison Gatlin on Twitter at @IBD_AGatlin.
