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Biogen profits surge on MS drug

Wednesday, January 29 14:39:35

Biogen Idec said today its new, high-profile oral multiple sclerosis drug Tecfidera had sales of $398 million in the fourth quarter, easily exceeding estimates for a third successive quarter and keeping it on track to top $1 billion in its first year on the market.

Some of those sales were due to U.S. inventory stocking ahead of a 10 percent Tecfidera price increase in December. Biogen said underlying patient demand for the drug represented about $348 million of the U.S. sales, still ahead of analysts' consensus expectations of about $335 million.

Biogen provided forecasts for 2014 that were likely to be viewed as a mixed bag, with revenue growth projections ahead of Wall Street expectations but an earnings outlook that fell short of the current analysts' view.

The company forecast revenue growth of about 22 percent to 25 percent and earnings of $11 to $11.20 per share, excluding items. Analysts, on average, were looking for revenue growth of about 20 percent and earnings of $11.63 per share, according to Thomson Reuters I/B/E/S.

"The guidance was very robust on the top line," said Cowen and Co analyst Eric Schmidt. "A conservative management team like Biogen starting the year off with guidance that's significantly above consensus, that's a strong signal."

The earnings forecast shortfall was likely due to $200 million in the research and development budget that the company has earmarked for future business development, Schmidt said.

"The EPS guidance appears conservative in light of revenue growth expectations," Sanford Bernstein analyst Geoffrey Porges said in a note. "Historically, Biogen has been able to beat initial guidance by 7 percent in the top line and 12 percent in the bottom line."

Investor focus has been squarely on the performance of Tecfidera, which has become the top-selling oral MS treatment in the United States despite being third to market. The company expects European approval in the coming days or weeks, which would be another major catalyst for sales.

Biogen said more than 6,000 doctors have prescribed Tecfidera so far, and that more than 30 percent of new patients in the fourth quarter had not been on prior therapies, such as Biogen's injectable MS drugs Avonex and Tysabri.

Biogen said its fourth-quarter profit jumped 57 percent, fueled by Tecfidera. The net profit rose to $457.3 million, or $1.92 per share, from $292.1 million, or $1.23 per share, a year earlier.