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Will Biogen (BIIB) Beat Estimates This Earnings Season?
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We expect Biogen (BIIB - Free Report) to beat expectations when it reports fourth-quarter and full-year 2022 results on Feb 15, before market open. In the last reported quarter, the company delivered an earnings surprise of 15.50%.
The company’s earnings beat estimates in three of the last four quarters, while missing expectations in one. The company has a four-quarter earnings surprise of 7.02%, on average.
Biogen’s stock has risen 31.7% in the past year against a decrease of 9.7% for the industry.
Image Source: Zacks Investment Research
Factors to Consider
Biogen’s sales in the fourth quarter are likely to have been hurt by lower sales of Tecfidera and Spinraza.
Biogen’s multiple sclerosis (MS) revenues have been declining since the past few quarters. It is unlikely that MS sales have improved in the fourth quarter.
Among Biogen’s MS drugs, sales of Tecfidera are likely to have declined steeply, hurt by the launch of multiple generics products in the United States. Tecfidera generics are also available in international markets such as Canada and Germany, which is expected to have hurt ex-U.S sales from the drug.
The Zacks Consensus Estimate and our estimates for fourth-quarter sales of Tecfidera are pegged at $291 million and $249.5 million, respectively.
Sales of another MS drug, Tysabri are also likely to have declined in the fourth quarter.
The Zacks Consensus Estimate and our estimates for Tysabri are pegged at $504 million and $499.8 million, respectively.
Sales volumes of another MS drug Vumerity were hurt by payer pressure and the contraction of the oral segment of the market in the United States in the third quarter. It remains to be seen if sales improved in the fourth quarter. The Zacks Consensus Estimate as well as our estimate for Vumerity is $153 million and $153.5 million, respectively. In outside U.S. markets, Vumerity is in the early stages of launch. However, due to contract manufacturing supply issues, the company has delayed any further country launches and expects to resume new country launches in 2023.
Biogen receives royalties on U.S. sales of Roche’s (RHHBY - Free Report) MS drug, Ocrevus, which is also expected to have contributed to the top line.
Roche’s Ocrevus (ocrelizumab) was approved for the treatment of relapsing MS and primary progressive MS in March 2017
Revenues from Biogen’s share of Roche’s drugs, Rituxan and Gazyva are also likely to have declined in the quarter due to biosimilar competition for Rituxan.
Increased competition in the United States is likely to have hurt demand and sales of Biogen’s spinal muscular atrophy drug, Spinraza, in the United States.
Outside the United States, sales of Spinraza might have been hurt due to increased competition in markets like Germany and Japan and currency headwinds. The Zacks Consensus Estimate for sales of Spinraza is $427 million, while our estimate is $442.2 million.
Biogen is likely to have recorded only minimal sales from the new Alzheimer’s drug, Aduhelm, in the fourth quarter. After the Centers for Medicare & Medicaid Services denied all Medicare beneficiaries access to Aduhelm, in its final NCD decision, Biogen decided to substantially wind down commercial operations for Aduhelm, retaining only minimal resources to manage patients’ access programs.
Biosimilars revenues may have benefited from volume increase, which is likely to have been offset by pricing pressure and currency headwinds. The Zacks Consensus Estimate for sales of biosimilars is $205 million, while our estimate is $219.7 million.
Importantly, Biogen typically sees seasonally higher SG&A spend in the fourth quarter, which is likely to have hurt profits.
The FDA granted accelerated approval to Biogen and partner Eisai’s anti-amyloid beta protofibril antibody candidate lecanemab to treat early Alzheimer’s disease. The drug will be marketed by the brand name of Leqembi. The accelerated approval is based on data from a phase II study (Study 201), which showed that treatment with lecanemab reduced the accumulation of amyloid beta plaque in the brain. Based on data from this study, Eisai also filed a supplemental biologics license application to the FDA to get a traditional approval for Leqembi. Eisai also filed marketing authorization applications for lecanemab in Japan and EU last month.
Biogen management can expect numerous questions on the company’s commercialization plans for Leqembi.
Earnings Whispers
Our proven model predicts an earnings beat for Biogen in the to-be-reported quarter. A stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for a likely positive surprise. This is the case here, as elaborated below.
Earnings ESP: Biogen’s Earnings ESP is +2.29% as the Most Accurate Estimate of $3.56 is higher than the Zacks Consensus Estimate of $3.48. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: Biogen has a Zacks Rank #3
Other Stocks to Consider
Here are some drug/biotech stocks that also have the right combination of elements to beat on earnings this time around:
Bayer’s stock has risen 4.7% in the past year. Bayer beat earnings estimates in three of the last four quarters, while missing the mark on one occasion. Bayer has a four-quarter earnings surprise of 18.23%, on average. BAYRY is scheduled to release its fourth-quarter 2022 results on Feb 28.
Alkermes (ALKS - Free Report) has an Earnings ESP of +115.4% and a Zacks Rank #2.
Alkermes’ stock has risen 15.4% in the past year. ALKS beat earnings expectations in each of the trailing four quarters, the average surprise being 306.73%.
Image: Bigstock
Will Biogen (BIIB) Beat Estimates This Earnings Season?
We expect Biogen (BIIB - Free Report) to beat expectations when it reports fourth-quarter and full-year 2022 results on Feb 15, before market open. In the last reported quarter, the company delivered an earnings surprise of 15.50%.
The company’s earnings beat estimates in three of the last four quarters, while missing expectations in one. The company has a four-quarter earnings surprise of 7.02%, on average.
Biogen’s stock has risen 31.7% in the past year against a decrease of 9.7% for the industry.
Image Source: Zacks Investment Research
Factors to Consider
Biogen’s sales in the fourth quarter are likely to have been hurt by lower sales of Tecfidera and Spinraza.
Biogen’s multiple sclerosis (MS) revenues have been declining since the past few quarters. It is unlikely that MS sales have improved in the fourth quarter.
Among Biogen’s MS drugs, sales of Tecfidera are likely to have declined steeply, hurt by the launch of multiple generics products in the United States. Tecfidera generics are also available in international markets such as Canada and Germany, which is expected to have hurt ex-U.S sales from the drug.
The Zacks Consensus Estimate and our estimates for fourth-quarter sales of Tecfidera are pegged at $291 million and $249.5 million, respectively.
Sales of another MS drug, Tysabri are also likely to have declined in the fourth quarter.
The Zacks Consensus Estimate and our estimates for Tysabri are pegged at $504 million and $499.8 million, respectively.
Sales volumes of another MS drug Vumerity were hurt by payer pressure and the contraction of the oral segment of the market in the United States in the third quarter. It remains to be seen if sales improved in the fourth quarter. The Zacks Consensus Estimate as well as our estimate for Vumerity is $153 million and $153.5 million, respectively. In outside U.S. markets, Vumerity is in the early stages of launch. However, due to contract manufacturing supply issues, the company has delayed any further country launches and expects to resume new country launches in 2023.
Biogen receives royalties on U.S. sales of Roche’s (RHHBY - Free Report) MS drug, Ocrevus, which is also expected to have contributed to the top line.
Roche’s Ocrevus (ocrelizumab) was approved for the treatment of relapsing MS and primary progressive MS in March 2017
Revenues from Biogen’s share of Roche’s drugs, Rituxan and Gazyva are also likely to have declined in the quarter due to biosimilar competition for Rituxan.
Increased competition in the United States is likely to have hurt demand and sales of Biogen’s spinal muscular atrophy drug, Spinraza, in the United States.
Outside the United States, sales of Spinraza might have been hurt due to increased competition in markets like Germany and Japan and currency headwinds. The Zacks Consensus Estimate for sales of Spinraza is $427 million, while our estimate is $442.2 million.
Biogen is likely to have recorded only minimal sales from the new Alzheimer’s drug, Aduhelm, in the fourth quarter. After the Centers for Medicare & Medicaid Services denied all Medicare beneficiaries access to Aduhelm, in its final NCD decision, Biogen decided to substantially wind down commercial operations for Aduhelm, retaining only minimal resources to manage patients’ access programs.
Biosimilars revenues may have benefited from volume increase, which is likely to have been offset by pricing pressure and currency headwinds. The Zacks Consensus Estimate for sales of biosimilars is $205 million, while our estimate is $219.7 million.
Importantly, Biogen typically sees seasonally higher SG&A spend in the fourth quarter, which is likely to have hurt profits.
The FDA granted accelerated approval to Biogen and partner Eisai’s anti-amyloid beta protofibril antibody candidate lecanemab to treat early Alzheimer’s disease. The drug will be marketed by the brand name of Leqembi. The accelerated approval is based on data from a phase II study (Study 201), which showed that treatment with lecanemab reduced the accumulation of amyloid beta plaque in the brain. Based on data from this study, Eisai also filed a supplemental biologics license application to the FDA to get a traditional approval for Leqembi. Eisai also filed marketing authorization applications for lecanemab in Japan and EU last month.
Biogen management can expect numerous questions on the company’s commercialization plans for Leqembi.
Earnings Whispers
Our proven model predicts an earnings beat for Biogen in the to-be-reported quarter. A stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for a likely positive surprise. This is the case here, as elaborated below.
Earnings ESP: Biogen’s Earnings ESP is +2.29% as the Most Accurate Estimate of $3.56 is higher than the Zacks Consensus Estimate of $3.48. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: Biogen has a Zacks Rank #3
Other Stocks to Consider
Here are some drug/biotech stocks that also have the right combination of elements to beat on earnings this time around:
Bayer (BAYRY - Free Report) has an Earnings ESP of +6.70% and a Zacks Rank #3. You can the complete list of today’s Zacks #1 Rank stocks here.
Bayer’s stock has risen 4.7% in the past year. Bayer beat earnings estimates in three of the last four quarters, while missing the mark on one occasion. Bayer has a four-quarter earnings surprise of 18.23%, on average. BAYRY is scheduled to release its fourth-quarter 2022 results on Feb 28.
Alkermes (ALKS - Free Report) has an Earnings ESP of +115.4% and a Zacks Rank #2.
Alkermes’ stock has risen 15.4% in the past year. ALKS beat earnings expectations in each of the trailing four quarters, the average surprise being 306.73%.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.