July 25, 2017 / 10:46 AM / 2 years ago

After strong quarter, Biogen rolls out growth strategy

(Reuters) - Biogen Inc laid out long-term plans to strengthen its mainstay multiple sclerosis (MS) business, develop more neuroscience drugs and shop for late-stage assets, after reporting robust second-quarter results on Tuesday.

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

Strong sales for its spinal muscular atrophy (SMA) drug, Spinraza, also spurred the U.S. drugmaker to raise its 2017 profit and revenue forecasts.

Spinraza could become one of the company’s “largest commercial assets, shifting the center of gravity for Biogen beyond MS”, CEO Michel Vounatsos said in a post-earnings conference call.

The treatment generated a whopping $203 million in the quarter, compared with the consensus estimate of $70 million, compiled by Evercore ISI.

The company said on Tuesday it may have slightly underestimated the number of patients with SMA, which could partly explain the surprisingly strong Spinraza demand.

The injection is priced at $750,000 for the first year of its use but drops to $375,000 a year after that.

Vounatsos said strong U.S. growth for Spinraza would continue as more patients opt for the treatment and expected growth to slow once they shift to maintenance therapy.

The bulk of Biogen’s revenue, however, still comes from its roster of MS drugs.

Despite rising competition, the company has maintained its global market share in the segment in the second-quarter.

Sales of Tecfidera, Biogen’s leading MS drug, came in at $1.11 billion, just ahead of consensus estimates.

Biogen said it expected the MS business to be the primary driver of future cash flow.

The company said it is also planning to develop more neuroscience treatments, including for dementia and movement-related disorders, as the U.S. population ages.

Biogen said it will also focus on developing rare disorder drugs and acquiring late-stage assets.

The company would explore deals of “all sizes”, and the largest transaction could be in $10 billion to $12 billion range, Vounatsos said.

Excluding items, Biogen earned $5.04 per share, handsomely beating estimates of $4.41 per share, according to Thomson Reuters I/B/E/S estimates.

The company raised its full-year adjusted profit forecast to a range of $20.80 per share to $21.40 per share, and revenue between $11.5 billion to $11.8 billion.

It had forecast earnings of $20.45 per share to $21.25 per share and revenue of $11.1 billion to $11.4 billion in January.

The increase in revenue outlook may still be conservative given Spinraza’s performance and prospects, analysts said.

Shares of the company were little changed at $282.06 in afternoon trading.

Reporting by Natalie Grover and Manas Mishra in Bengaluru; Editing by Arun Koyyur

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