(Reuters) - Biogen Inc on Thursday reported second quarter profit that blew past Wall Street estimates and significantly raised its full-year earnings forecast, while announcing that Chief Executive George Scangos would step down in the coming months once a successor is found.
Shares of Biogen, whose board also authorized a $5 billion share repurchase program, rose more than 7 percent.
“This is the right time for a new leader to take the reins and lead Biogen through its next stage of development,” Scangos said in a statement.
The biotechnology company said it will begin a search for a new CEO immediately, considering both internal and external candidates.
“When you look at what the growth of this company has been under him by any metric, it’s been a terrific overall six-year run, even if the last 12 months weren’t up to the par of the first five,” said Cowen and Co analyst Eric Schmidt.
Biogen now expects 2016 adjusted earnings of $19.70 to $20 per share and revenue of $11.2 billion to $11.4 billion, up from its previous forecast of $18.30 to $18.60 per share and revenue of $11.1 billion to $11.3 billion.
Excluding special items, Biogen earned $5.21 per share, topping analysts’ average expectations by 54 cents, according to Thomson Reuters I/B/E/S.
Net income rose to $1.05 billion, or $4.79 per share, from $927.3 million, or $3.93 per share, a year earlier.
Sales of Tecfidera, the market leading oral multiple sclerosis drug, rose 12 percent to $987 million for the quarter, slightly ahead of Wall Street estimates. Sales of Biogen’s other MS drugs, including Tysabri and Avonex, were in line or ahead of Wall Street estimates.
Biogen said it expects to begin selling a new once-monthly MS treatment, Zinbryta, in the United States and Europe next month.
Hemophilia drugs Eloctate and Alprolix posted sales of $125 million and $80 million, respectively, above estimates of $190 million for both drugs.
Biogen in May announced plans to spin off its hemophilia business into a publicly traded entity and said it now expects that to be completed in early 2017.
Amid slowing Tecfidera growth, the company last year embarked on a sweeping restructuring program to cut costs and focus on core areas, such as neurology, with high risk, potentially high reward, experimental treatments for Alzheimer’s disease under development.
Total revenue rose 12 percent to $2.89 billion, exceeding Wall Street estimate of $2.79 billion.
Biogen shares rose $18.23 to $280.69 on Nasdaq.
Reporting by Bill Berkrot in New York and Natalie Grover in Bengaluru; Editing by Sriraj Kalluvila and Phil Berlowitz