Biogen revenue trounces forecast as MS drug sales surge
(Reuters) - Biogen Idec Inc reported blowout quarterly results and raised its full-year forecast on Wednesday on surging sales of its new Tecfidera oral treatment for multiple sclerosis, boosting shares 11 percent.
"These are spectacular results, and this is one of the biggest profit beats for Biogen I've seen in years," said RBC Capital Markets analyst Michael Yee.
Tecfidera, which was approved in March 2013, posted sales of $700 million in the second quarter, making it one of the fastest-growing prescription medicines in history. U.S. sales of $585 million far exceeded Wall Street forecasts in the $485 million range.
The drug is taking flight as patients with the progressive neurological disease move from injectable treatments to more convenient pills, including Novartis AG's Gilenya and Sanofi SA's Aubagio.
Gilenya, with annual sales of more than $2 billion, in 2010 became the first pill approved for MS, followed by Aubagio, which has annual sales of about $400 million.
But Gilenya has been associated with cardiovascular risks, and reports of sudden death, while Aubagio is deemed to be somewhat lacking in potency and raises the risk of liver problems.
"Tecfidera has the best balance of efficacy and safety" among the three oral agents, said Robert Baird and Co analyst Chris Raymond.
He said Tecfidera, which costs about $48,000 a year in the United States and about $30,000 in Europe, could eventually reap annual sales of up to $6 billion.
"Clearly, if you have to take a chronic therapy, you'd rather take a pill than an injection," he said.
Multiple sclerosis affects an estimated 2.3 million people worldwide. The condition, often leading to paralysis, is caused by damage to the protective myelin sheath of nerves and is believed to be the result of attacks by an overactive immune system.
Biogen's revenue jumped 40 percent to $2.42 billion, about $250 million above Wall Street expectations.
Earnings of $3.49 per share, excluding special items, blew past the $2.83 average forecast of analysts surveyed by Thomson Reuters I/B/E/S.
The results prompted Biogen to raise its 2014 earnings outlook to between $12.90 and $13.10 per share. In April, it had forecast $11.35 to $11.45.
RBC Capital Markets' Yee said he believed Biogen would likely beat analysts' estimates in coming quarters and keep raising its forecasts.
Avonex, an injectable interferon treatment for MS that is still Biogen's biggest product, posted slightly lower sales of $774 million. Sales of Tysabri, a high-potency infused MS treatment, leaped 38 percent to $533 million. That included $54 million of previously deferred revenue from Italy.
The company on Wednesday received European approval for a longer-lasting interferon treatment for MS called Plegridy that is awaiting U.S. approval.
Cowen and Co analyst Eric Schmidt said he expects Plegridy sales of close to $300 million next year, as some patients switch from Avonex.
Leading rival MS brands include Teva Pharmaceutical Industries Ltd's Copaxone and its newer version, which is taken less frequently.
Others include Bayer AG's Betaseron and Rebif from Pfizer Inc.
Biogen is conducting mid-stage trials of an MS drug meant to restore myelin and thereby improve physical and cognitive function. But data from the trial is not expected until 2016, and Schmidt cautioned that it was a high-risk "speculative" effort.
Biogen said it earned $723.1 million, or $3.01 per share, in the quarter, versus $491 million, or $2.06 per share, a year earlier.
Shares of Biogen closed up $33.93, or 11.2 percent, to $337.60 on the Nasdaq.