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What Awaits Biogen (BIIB) in Q2 Earnings Post Leqembi Setback?
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Biogen (BIIB - Free Report) , due to report second-quarter 2024 results on Aug 1, suffered a setback recently. Biogen and its Japanese partner Eisai on Friday announced that the Committee for Medicinal Products for Human Use (CHMP) of the European Medicines Agency has given a negative opinion regarding marketing approval for their anti-amyloid beta therapy, Leqembi (lecanemab) for early Alzheimer’s disease in Europe. The CHMP’s negative opinion was reportedly due to a brain swelling side effect called amyloid-related imaging abnormalities associated with the use of such therapies.
Leqembi has already been launched in the United States, Japan and China and was recently approved in some other countries like Israel, Hong Kong and South Korea. Eisai will request the CHMP to re-visit its opinion.
The CHMP’s negative opinion was a major setback for Biogen and Eisai. Biogen’s shares declined more than 7% on Friday, as the CHMP’s opinion came as a surprise to the investor community.
Biogen’s stock has declined 18.4% so far this year against an increase of 0.5% for the industry.
Image Source: Zacks Investment Research
Now, the attention shifts to Biogen’s second-quarter results. In the last reported quarter, the company delivered a negative earnings surprise of 6.38%.
Factors to Consider
Biogen’s sales in the second quarter are likely to have been hurt by lower sales of its multiple sclerosis (“MS”) drugs like Tecfidera and Tysabri amid rising competitive pressure in the MS market. Tecfidera sales are declining as multiple generic versions of the drug have been launched in the United States, Brazil and certain EU countries.
The Zacks Consensus Estimate and our model estimate for second-quarter sales of Tecfidera are pegged at $236.0 million and $228.8 million, respectively.
The Zacks Consensus Estimate and our estimate for Tysabri are pegged at $420 million and $416.8 million, respectively.
Sales of another MS drug, Vumerity, are likely to have risen, driven by global patient growth.
The Zacks Consensus Estimate and our estimate for Vumerity are pegged at $154.0 million and $154.4 million, respectively.
Sales growth of Biogen’s spinal muscular atrophy drug, Spinraza, was hurt by unfavorable shipment timing in certain emerging markets, increased competition and currency headwinds in the first quarter. While increased competition is expected to have continued to hurt sales, the impact of unfavorable shipment timing is likely to have reversed in the second quarter.
The Zacks Consensus Estimate and our estimate for Spinraza are pegged at $403.0 and $434.9 million, respectively.
Investors will be keen to know the sales numbers of Biogen’s newly launched rare disease drug Skyclarys. Sales are likely to have improved from the first-quarter levels.
Investors will be keen to know the collaboration profit-sharing revenues from Biogen’s new drug, Zurzuvae (zuranolone), which was launched for postpartum depression in December 2023. Biogen has a collaboration with Sage Therapeutics (SAGE - Free Report) for Zurzuvae. Sage and Biogen equally share profits and losses for the commercialization of Zurzuvae in the United States, while outside U.S. markets, Biogen records product sales (excluding Japan, Taiwan and South Korea) and pays royalties to Sage.
Contract manufacturing and royalty revenues are expected to have declined in the quarter. Contract manufacturing and royalty revenues include Biogen’s 50% share of revenues (including royalties) from the collaboration with Eisai for a new Alzheimer’s drug, Leqembi, and revenues from the manufacturing of Leqembi. The drug gained full approval from the FDA for early Alzheimer’s disease in the United States and broad reimbursement from the Centers for Medicare & Medicaid Services in July 2023.
Leqembi sales, as announced by Eisai, improved in the first quarter, a trend expected to have continued in the second quarter. Biogen/Eisai are increasing promotional efforts for Leqembi as access and infrastructure are progressing and patient volume is accelerating.
In May, the European Commission granted marketing approval to Qalsody for treating patients with amyotrophic lateral sclerosis with superoxide dismutase 1 mutation in Europe. Qalsody/tofersen was approved in the United States in April 2023 where the launch uptake has been encouraging.
Biosimilar revenues are expected to have been hurt by supply constraints. Biogen is evaluating strategic options for this business, including retaining the business. An update is expected on the conference call.
Lower cost of sales and lower operating costs due to cost-saving initiatives are expected to have boosted profits.
Earnings Surprise History
The company’s earnings beat estimates in three of the last four quarters while missing in one. The company has a four-quarter earnings surprise of 3.91%, on average.
Our proven model does not conclusively predict an earnings beat for Biogen this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. But that is not the case here.
Earnings ESP: Biogen’s Earnings ESP is -1.09% as the Most Accurate Estimate of $3.96 is pegged lower than the Zacks Consensus Estimate of $4.00. 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.
Stocks to Consider
Here are some drug/biotech stocks that have the right combination of elements to beat on earnings this time around:
Shares of Agenus have plunged 60.4% in the year-to-date period. Earnings of Agenus beat estimates in two of the trailing four quarters, matching once and missing on the remaining occasion. On average, AGEN delivered a negative surprise of 129.78% in the last four quarters.
Amgen (AMGN - Free Report) has an Earnings ESP of +0.48% and a Zacks Rank #3 at present.
Amgen stock has jumped 16.2% year to date. Amgen beat earnings estimates in each of the trailing last four quarters. AMGN delivered an average earnings surprise of 6.42% in the last four quarters. AMGN is set to report second-quarter earnings on Aug 6.
Image: Bigstock
What Awaits Biogen (BIIB) in Q2 Earnings Post Leqembi Setback?
Biogen (BIIB - Free Report) , due to report second-quarter 2024 results on Aug 1, suffered a setback recently. Biogen and its Japanese partner Eisai on Friday announced that the Committee for Medicinal Products for Human Use (CHMP) of the European Medicines Agency has given a negative opinion regarding marketing approval for their anti-amyloid beta therapy, Leqembi (lecanemab) for early Alzheimer’s disease in Europe. The CHMP’s negative opinion was reportedly due to a brain swelling side effect called amyloid-related imaging abnormalities associated with the use of such therapies.
Leqembi has already been launched in the United States, Japan and China and was recently approved in some other countries like Israel, Hong Kong and South Korea. Eisai will request the CHMP to re-visit its opinion.
The CHMP’s negative opinion was a major setback for Biogen and Eisai. Biogen’s shares declined more than 7% on Friday, as the CHMP’s opinion came as a surprise to the investor community.
Biogen’s stock has declined 18.4% so far this year against an increase of 0.5% for the industry.
Image Source: Zacks Investment Research
Now, the attention shifts to Biogen’s second-quarter results. In the last reported quarter, the company delivered a negative earnings surprise of 6.38%.
Factors to Consider
Biogen’s sales in the second quarter are likely to have been hurt by lower sales of its multiple sclerosis (“MS”) drugs like Tecfidera and Tysabri amid rising competitive pressure in the MS market. Tecfidera sales are declining as multiple generic versions of the drug have been launched in the United States, Brazil and certain EU countries.
The Zacks Consensus Estimate and our model estimate for second-quarter sales of Tecfidera are pegged at $236.0 million and $228.8 million, respectively.
The Zacks Consensus Estimate and our estimate for Tysabri are pegged at $420 million and $416.8 million, respectively.
Sales of another MS drug, Vumerity, are likely to have risen, driven by global patient growth.
The Zacks Consensus Estimate and our estimate for Vumerity are pegged at $154.0 million and $154.4 million, respectively.
Sales growth of Biogen’s spinal muscular atrophy drug, Spinraza, was hurt by unfavorable shipment timing in certain emerging markets, increased competition and currency headwinds in the first quarter. While increased competition is expected to have continued to hurt sales, the impact of unfavorable shipment timing is likely to have reversed in the second quarter.
The Zacks Consensus Estimate and our estimate for Spinraza are pegged at $403.0 and $434.9 million, respectively.
Investors will be keen to know the sales numbers of Biogen’s newly launched rare disease drug Skyclarys. Sales are likely to have improved from the first-quarter levels.
Investors will be keen to know the collaboration profit-sharing revenues from Biogen’s new drug, Zurzuvae (zuranolone), which was launched for postpartum depression in December 2023. Biogen has a collaboration with Sage Therapeutics (SAGE - Free Report) for Zurzuvae. Sage and Biogen equally share profits and losses for the commercialization of Zurzuvae in the United States, while outside U.S. markets, Biogen records product sales (excluding Japan, Taiwan and South Korea) and pays royalties to Sage.
Contract manufacturing and royalty revenues are expected to have declined in the quarter. Contract manufacturing and royalty revenues include Biogen’s 50% share of revenues (including royalties) from the collaboration with Eisai for a new Alzheimer’s drug, Leqembi, and revenues from the manufacturing of Leqembi. The drug gained full approval from the FDA for early Alzheimer’s disease in the United States and broad reimbursement from the Centers for Medicare & Medicaid Services in July 2023.
Leqembi sales, as announced by Eisai, improved in the first quarter, a trend expected to have continued in the second quarter. Biogen/Eisai are increasing promotional efforts for Leqembi as access and infrastructure are progressing and patient volume is accelerating.
In May, the European Commission granted marketing approval to Qalsody for treating patients with amyotrophic lateral sclerosis with superoxide dismutase 1 mutation in Europe. Qalsody/tofersen was approved in the United States in April 2023 where the launch uptake has been encouraging.
Biosimilar revenues are expected to have been hurt by supply constraints. Biogen is evaluating strategic options for this business, including retaining the business. An update is expected on the conference call.
Lower cost of sales and lower operating costs due to cost-saving initiatives are expected to have boosted profits.
Earnings Surprise History
The company’s earnings beat estimates in three of the last four quarters while missing in one. The company has a four-quarter earnings surprise of 3.91%, on average.
Biogen Inc. Price and EPS Surprise
Biogen Inc. price-eps-surprise | Biogen Inc. Quote
Earnings Whispers
Our proven model does not conclusively predict an earnings beat for Biogen this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. But that is not the case here.
Earnings ESP: Biogen’s Earnings ESP is -1.09% as the Most Accurate Estimate of $3.96 is pegged lower than the Zacks Consensus Estimate of $4.00. 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.
Stocks to Consider
Here are some drug/biotech stocks that have the right combination of elements to beat on earnings this time around:
Agenus (AGEN - Free Report) has an Earnings ESP of +7.55% and a Zacks Rank #3 at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
Shares of Agenus have plunged 60.4% in the year-to-date period. Earnings of Agenus beat estimates in two of the trailing four quarters, matching once and missing on the remaining occasion. On average, AGEN delivered a negative surprise of 129.78% in the last four quarters.
Amgen (AMGN - Free Report) has an Earnings ESP of +0.48% and a Zacks Rank #3 at present.
Amgen stock has jumped 16.2% year to date. Amgen beat earnings estimates in each of the trailing last four quarters. AMGN delivered an average earnings surprise of 6.42% in the last four quarters. AMGN is set to report second-quarter earnings on Aug 6.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.