Based in Cambridge, Massachusetts, large cap biotechnology company Biogen (NASDAQ:BIIB) reported second quarter 2020 financial results before the market open on July 22nd. Revenues were up 2% to $3.7 billion. Multiple sclerosis, the company’s largest reporting segment, accounted for approximately 63% of sales and had a 2% revenue decrease. This was offset by a 1% revenue increase for spinal muscular atrophy (SMA) drug SPINRAZA and a 155% jump in “Other Revenues” related to the licensing of manufacturing-related intellectual property (IP). Biosimilar drug revenue fell 7%.
The company estimated that the COVID-19 pandemic had a positive impact on sales of around $100 million in the first quarter of 2020 of which approximately $75 million was utilized in the second quarter.
Adjusted earnings per share (EPS) of $10.26 rose 12% and surpassed the Zacks consensus EPS estimate of $7.94.
Earlier this month Biogen submitted a biologics license application (BLA) for its key Alzheimer’s drug candidate aducanumab. The submission included clinical data from multiple studies. Last year the company ended the aducanumab trial following a research setback only to announce plans to seek FDA approval for the drug several months later. Biogen is developing the drug in collaboration with Japanese pharmaceutical company Eisai Co., Ltd.
CEO Michel Vounatsos stated, “In the second quarter, Biogen continued to deliver strong financial results. We are pleased to have completed the BLA submission for aducanumab and look forward to the prospect of launching the first therapy to reduce clinical decline in Alzheimer’s disease.”
Busy summer highlighted by positive trial data
Over the last couple of months Biogen has had several new developments. It presented positive phase 2 data in its trial of BIIB059 for the treatment of cutaneous lupus erythematosus. The 16-week LILAC study evaluated the efficacy and safety of the monoclonal antibody and favorable results were shared at the European E-Congress of Rheumatology.
It also presented new data on SPINRAZA which showed unprecedented survival in patients with pre-symptomatic SMA. It plans to initiate a global phase 4 clinical study to evaluate the efficacy and safety of the drug candidate and to enroll patients by the first quarter of 2021.
Additionally, last month Biogen announced the appointment of new CFO Michael McDonnell who is expected to take over the executive role on August 15th.
Biogen repurchased approximately 9 million shares worth around $2.81 billion during the second quarter. This means it has about $1.25 billion left in its December 2019 share repurchase program. Further stock buybacks may help support the company share price in the months ahead.
Biogen exited the quarter with a cash equivalent balance of $5.25 billion compared to a debt balance of $7.42 billion. This puts it in a solid capital position to pursue organic growth opportunities in addition to further acquisitions. Last year it acquired retinal disorder therapy company Nightstar Therapeutics for $800 million.
Management also provided an update to its financial guidance for the full year. It lowered its revenue outlook to a range of $13.8 billion to $14.2 billion compared to its prior range of $14.0 billion to $14.3 billion. Non-GAAP EPS guidance, however, was upwardly revised to a range of $32.00 to $34.00 versus a prior guidance of $31.50 to $33.50 driven by an expectation of lower SG&A expenses.
The company’s ambitions with Alzheimer’s therapy aducanumab are part of a bigger plan to build a portfolio of products based on its expertise in neuroscience. Biogen’s pipeline has several growth opportunities related to the development of treatments for ALS, ophthalmology, lupus, and stroke.