Biogen Profit Surges, Tecfidera Disappoint

Earnings Reuters

Sales of Biogen Idec Inc's (BIIB) big-selling new oral multiple sclerosis drug Tecfidera fell short of lofty Wall Street estimates for the first time and its shares fell nearly 3 percent, even as the company reported higher-than-expected third-quarter profit and raised its full-year earnings forecast.

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Tecfidera, which has enjoyed one of the best new drug launches in pharmaceutical history since its March 2013 U.S. approval, had sales of $787 million in the quarter. Analysts, who in previous quarters had watched Tecfidera sail past their sales estimates, were looking for about $800 million this time around.

Biogen raised its full-year adjusted earnings forecast to between $13.45 and $13.55 per share, based on lower business development spending expectations and decreased research and development cost projections for the rest of the year. It had previously forecast $12.90 to $13.10 per share, excluding items.

"For a company that's been beating and crushing numbers, it's hard to see people getting terribly excited about this," Sanford Bernstein analyst Geoffrey Porges said.

"You have to wonder if this is the new normal for Biogen or whether they can resume that spectacular growth that they enjoyed over the last 12 months or so," Porges added.

The U.S. biotechnology company's net profit jumped to $856.1 million, or $3.62 per share, from $487.6 million, or $2.05 per share, a year ago.

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Excluding items, Biogen earned $3.80 per share. Analysts on average expected $3.46 per share, according to Thomson Reuters I/B/E/S.

Revenue rose 37 percent to $2.5 billion, roughly in line with estimates of $2.48 billion.

The older injectable multiple sclerosis drug Tysabri had sales of $501 million, edging past analyst expectations of about $485 million.

The company's interferon-based MS drugs Avonex and the new longer-acting Plegridy had combined sales of $745 million, missing Wall Street estimates of about $767 million.

Avonex has been losing some of its market share to Tecfidera, which had U.S. sales of $638 million and sales of $149 million outside the United States, where it is still very early in its launch.

"With all of their MS products you have to wonder, is there enough incremental revenue to support continued growth or are they just cannibalizing the rest of their franchise every time they launch a new product," Porges said.

Biogen shares fell to $318 in premarket trading from Tuesday's Nasdaq close at $326.77. (Reporting by Bill Berkrot in New York; Editing by Jeffrey Benkoe and Chizu Nomiyama)