Biogen halves sales growth forecast as Tecfidera demand stalls

(Reuters) - Biogen Inc BIIB.O more than halved its sales growth forecast for 2015, saying it expects demand for its flagship multiple sclerosis (MS) drug, Tecfidera, to continue slowing this year in the United States.

Biogen Idec CEO George Scangos speaks to a Reuters reporter at the company's headquarters in Weston, Massachusetts March 2, 201 REUTERS/Brian Snyder

Tecfidera has been Biogen’s main growth driver since its launch in 2013, but a saturated U.S. market and reports linking the drug to brain infections meant that sales rose less than analysts expectations for the second straight quarter.

Biogen’s stock fell as much as 18.8 percent to a seven-month low, wiping out about $17 billion of its value, after the company’s weak forecast and lackluster second-quarter results on Friday.

The company also reported disappointing sales for its other MS drugs. Sales of injectable MS drug Tysabri and interferon-based MS drug Avonex fell more than analysts expected, while sales of the longer-lasting Plegridy also missed estimates.

Biogen needs "fixing", and it does not have the luxury of time to build out its pipeline gradually like Celgene Corp CELG.O does, Piper Jaffray's Joshua Schimmer said.

Biogen plans to continue investing in its pipeline, while controlling costs, the biotech company’s executives said on a conference call.

“I don’t think we’re in any panic situation but as we see good opportunities we will be aggressive about bringing them in,” CEO George Scangos said after analysts on the call suggested Biogen consider acquisitions to rejuvenate growth.

Biogen said it now assumes “extremely limited” U.S. patient growth for Tecfidera sequentially for the rest of 2015, and also highlighted lower-than-anticipated reimbursements in Europe.

With Tecfidera’s sales slowing, Biogen chopped its full-year sales growth forecast to 6-8 percent from 14-16 percent. The company’s sales had risen 40 percent in 2014 and 25.7 percent in 2013.

Cambridge, Massachusetts-based Biogen’s second-quarter sales rose 7 percent to $2.6 billion, but missed analysts’ average estimate of $2.7 billion, according to Thomson Reuters I/B/E/S.

Biogen’s stock hit a record high in March when tests showed the company’s experimental Alzheimer’s drug significantly slowed mental decline – a potential breakthrough in treating the incurable disease.

But that enthusiasm was tempered on Wednesday, after longer term data showed that a particular dose of the drug failed to significantly slow mental decline.

Relying on the Alzheimer’s program is too risky, said Schimmer, who hacked his price target on the stock by $49 to $361.

Biogen’s stock was down 18.5 percent at $315, easing slightly from its session low of $312.50.

Editing by Savio D’Souza