Biogen 2022 forecast below Street view on Alzheimer’s drug uncertainty


(Reuters) – Biogen Inc (BIIB.O) on Thursday forecast 2022 profit well below Wall Street estimates as sales of its new Alzheimer’s disease drug stall amid questions over its efficacy and a looming U.S. government coverage decision that could severely limit its future use and force further cost cutting.

Its shares were off by more than 4% in early trading.

The U.S. Centers for Medicaid and Medicare Services (CMS) in January proposed to restrict coverage for Alzheimer’s drugs, including Biogen’s Aduhelm, only to patients taking part in approved clinical trials. A final decision is expected in April.

The company warned that it could be forced to cut more costs, beyond the current program to save $500 million annually, if the final coverage decision is not broader than the proposal.

“We will take aggressive steps should the … (coverage proposal) remain in its current form,” said Chief Executive Officer Michel Vounatsos.

Chief Financial Officer Michael McDonnell also said the company would continue to explore all of its options around business development deals of all sizes.

Biogen had already met with CMS to present its views on the regulator’s proposal. Vounatsos said Biogen would advocate for a final decision that would provide coverage to Alzheimer’s patients with mild cognitive impairment or mild dementia, the group that was tested in the company’s clinical trials.

The decision on Aduhelm, once touted as a potential multibillion-dollar drug, comes at a pivotal time for the company, with sales of its multiple sclerosis drug Tecfidera under pressure from generic competition.

A test tube is seen in front of displayed Biogen logo in this illustration taken, December 1, 2021. REUTERS/Dado Ruvic/Illustration/File Photo

Biogen on Thursday forecast full-year adjusted profit of $14.25 to $16.00 per share, well short of analysts’ estimates of $18.82 per share, according to Refinitiv IBES.

Biogen’s forecast highlights “lots of melting ice cubes” for the company, said Piper Sandler analyst Christopher Raymond, pointing to minimal revenue assumptions for Aduhelm and falling Tecfidera sales.

Aduhelm brought in $1 million in sales in the fourth quarter, compared to already diminished estimates of $2.8 million.

In the fourth quarter, Biogen earned $3.39 per share, edging past analysts’ estimates by a cent.

Reporting by Manas Mishra in Bengaluru; Editing by Saumyadeb Chakrabarty and Bill Berkrot

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