January 26, 2017 / 11:52 AM / 7 months ago

Biogen sees gradual Spinraza launch, eyes mid-year EU approval

A sign marks a Biogen facility in Cambridge, Massachusetts, U.S. January 26, 2017.Brian Snyder

(Reuters) - Biogen Inc (BIIB.O) said on Thursday that the first U.S. patients have received its new drug for the leading genetic cause of death in infants and that it anticipates mid-year approval of Spinraza in the European Union.

However, the U.S. biotech cautioned it expects Spinraza to be launched gradually throughout the year as it works to secure reimbursement from insurers.

The extremely expensive drug, the first approved treatment for the rare, often fatal spinal muscular atrophy (SMA), is seen as the most important new growth driver for Biogen, with analysts forecasting eventual annual sales between $1 billion and $2 billion.

Biogen expects its multiple sclerosis business to be stable following recent declines and called Spinraza sales "the biggest ambiguity" in the 2017 forecast it provided.

The company forecast adjusted profit of $20.45 to $21.25 per share, with analysts on average estimating $21.02.

Biogen, which will spin off its hemophilia business on Feb. 1, sees 2017 revenue of $11.1 billion to $11.4 billion, below the Thomson Reuters I/B/E/S estimate of $12.08 billion.

But optimistic commentary around Spinraza and a promise of continued expense management helped lift shares more than 3 percent to $282.64.

"Biogen provided initial 2017 financial guidance that we view as favorable, based upon a solid top-line growth forecast and substantial cost savings," Cowen and Co analyst Eric Schmidt said in a research note.

Health insurer Anthem Inc (ANTM.N) this month said it would limit Spinraza coverage to only the most severe patients, even though it received approval for all grades of SMA.

But new Biogen Chief Executive Michel Vounatsos said there have been reimbursement successes as well since the late December approval.

"Logic will prevail in patient access for a therapy that will save lives," Vounatsos said on a conference call. "The demand is there."

A sign marks a Biogen facility in Cambridge, Massachusetts, U.S. January 26, 2017.Brian Snyder

Spinraza is the first major drug launch under Vounatsos, who succeeded George Scangos this month.

PRICING SCRUTINY

The list price for Spinraza is a whopping $750,000 for the first year of therapy, dropping to about $375,000 a year after that. Insurers have been amenable to paying for very expensive drugs that extend lives in diseases with small patient populations.

But political and payer scrutiny of U.S. drug pricing has intensified with President Donald Trump recently accusing pharmaceutical companies of "getting away with murder."

Biogen said it has also filed for Spinraza approval in Japan, Australia and Canada and expects to meet with Japanese regulators in the coming days.

The company also said patient enrollment for the Phase III trial of its closely-watched experimental Alzheimer's disease drug aducanumab was ahead of its expectations.

Biogen has placed big bets on extremely high-risk, high-reward therapy areas such as Alzheimer's and Parkinson's disease.

Excluding items, Biogen reported a fourth-quarter profit of $2.99 per share, beating analysts' average estimate by 3 cents.

Biogen's top-seller and market-leading oral MS treatment Tecfidera had sales of about $1 billion for the quarter, roughly in line with Wall Street estimates.

The company noted that Sanofi's (SASY.PA) Aubagio had recently made some inroads into Tecfidera's market share.

Sales of the older injectable MS drugs Tysabri and Avonex both declined.

Reporting by Bill Berkrot in New York and Natalie Grover in Bengaluru; Editing by Savio D'Souza, Sriraj Kalluvila and Paul Simao

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