Biogen Idec (BIIB) reported second quarter earnings per share of $2.29 (including the impact of stock-based compensation expense), well above the Zacks Consensus Estimate of $1.83 and 25.8% above the year-ago earnings. Second quarter 2013 revenues increased 21% to $1.7 billion. Revenues were well above the Zacks Consensus Estimate of $1.6 billion. Newly launched multiple sclerosis (MS) drug, Tecfidera, drove second quarter results.
Including one-time items, second quarter 2013 earnings increased 28% to $2.06 per share.
The Quarter in Detail
Second quarter Tysabri revenues increased 38% to $387 million from the year-ago period. Biogen is now booking 100% of Tysabri revenues following its acquisition of Elan’s (ELN) rights in Tysabri. Global in-market net revenues of Tysabri came in at $387 million (down 2%) in the second quarter of 2013.
Tysabri global revenues consisted of U.S. revenues of $218 million and ROW (Rest of the World) revenues of $169 million. Revenues declined on a sequential basis.
Meanwhile, Avonex, Biogen’s lead MS product, posted second quarter revenues of $774 million (up 2%). On a sequential basis, Avonex revenues were up 3.8%. Avonex revenues in ex- U.S. markets were $295 million.
Biogen has been working on driving Avonex revenues. The company launched Avonex Pen in the U.S. last year. Avonex Pen helps improve convenient administration. The rollout of Avonex Pen in the EU and U.S. should increase patient and physician interest in Avonex.
Rituxan revenues grew 1% to $289 million in the second quarter.
Tecfidera, the latest offering from Biogen’s MS portfolio, is off to a strong start with sales coming in at $192 million. This includes patient demand (approximately $110 million) as well as inventory stocking (approximately $82 million) at wholesaler and specialty pharmacy levels. Biogen had launched Tecfidera in early Apr in the U.S.
Raises Guidance Again
Biogen raised its guidance yet again for 2013. The company now expects earnings in the range of $8.25 – $8.50 per share on revenue growth of 22% – 23%. The company was previously expecting earnings in the range of $7.80 – $7.90 per share on revenue growth of 16% – 18%. The Zacks Consensus Estimate currently stands at $8.00 per share. With Biogen raising its guidance, we expect significant upward revisions in estimates.
The company maintained its SG&A guidance of 24% to 26% of total revenues but tweaked its R&D guidance to 21% to 23% of total revenues (old guidance: 22% to 23% of total revenues).
Our Take
Biogen started 2013 on a strong note with better-than-expected earnings and revenues and the momentum continues with second quarter earnings beating expectations by a wide margin. Results were primarily driven by the strong performance of Tecfidera. We are also positive on Biogen’s gaining full control over Tysabri. Key products, Avonex and Tysabri, should continue contributing significantly to sales. Tecfidera should help drive long-term growth. Biogen has several development and regulatory catalysts coming up in the next few quarters. With Tecfidera launched, we expect investor focus to remain on its commercialization and sales ramp up.
Biogen currently carries a Zacks Rank #3 (Hold). Shares were up in pre-market trading. At present, companies like Actelion (ALIOF) and Amgen (AMGN) look well-positioned. While Actelion is a Zacks Rank #1 (Strong Buy) stock, Amgen is a Zacks Rank #2 (Buy) stock.
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