Old drugs decline as new drugs take over! Acquisition-driven transformation shows initial results, Biogen (BIIB.US) raises full-year revenue guidance

According to Zhitong Finance APP, Biogen (BIIB.US) reported quarterly revenue and adjusted earnings that both exceeded analysts' expectations, thanks to increased sales of newly acquired kidney and ophthalmology drugs, which successfully offset the decline in revenue from multiple sclerosis (MS) drugs. For the fiscal quarter, the company's revenue grew by 3.8% year-over-year to $2.7 billion, surpassing expectations by $240 million; earnings per share were $3.60, exceeding forecasts by $1.57.

The company has raised its full-year revenue outlook, now expecting sales to achieve mid-single-digit percentage growth instead of the previously forecasted mid-single-digit percentage decline. However, Biogen lowered its adjusted earnings guidance to reflect costs and milestone payments related to acquisitions.

Biogen has cut its full-year adjusted earnings per share guidance from $14.25-$15.25 to $12-$13, reflecting R&D expenses and milestone payments tied to acquisitions, as well as financing costs associated with the Apellis deal. Biogen noted that excluding these items, the company’s core earnings guidance would have been increased by $0.60 per share.

Under CEO Christopher Viehbacher's leadership, Biogen has adopted an aggressive acquisition strategy to expand beyond its traditional neuroscience business and seek new sources of growth to offset its aging MS drug portfolio. This strategy has allowed the company to enter new therapeutic areas such as kidney diseases and immunology.

Viehbacher stated in a release that Biogen has made "significant progress" in returning the company to growth, noting that sales from new medicines have now surpassed the steadily declining traditional MS drug portfolio. Among them, Leqembi, a key Alzheimer's drug jointly marketed with Eisai, saw its quarterly sales increase by 15% to $184 million, roughly in line with analysts' expectations.

In May of this year, Biogen completed its $5.6 billion acquisition of Apellis Pharmaceuticals Inc. Apellis' product portfolio includes Syfovre, a treatment for a blinding immune system disease, as well as Empaveli, used for a rare blood disease and certain rare kidney disorders. Biogen reported that these two drugs generated nearly $128 million in revenue during the remainder of the quarter.

In June, Biogen also announced that it would acquire privately held immunology drug developer RayThera Inc. for up to $1 billion.

Several other new drugs also recorded strong quarterly growth. Among them, Zurzuvae for postpartum depression saw sales surge 53% to $71 million; while Skyclarys, used to treat the rare disease Friedreich's ataxia, saw sales climb to about $168 million, exceeding analysts' expectations.