Biogen raises 2017 forecast on Spinraza success
(Reuters) — Biogen Inc’s second-quarter profit smashed estimates on Tuesday, boosted by strong sales of its spinal muscular atrophy (SMA) drug, Spinraza, which is priced at $750,000 for the first year of therapy.
Buoyed by the demand for Spinraza, the U.S. drugmaker raised its full-year earnings and revenue forecasts, sending shares up 4.1 percent in premarket trading.
The U.S. Food and Drug Administration last December approved the injection for SMA, a rare disorder and the leading genetic cause of death in infants.
The expensive drug, priced at $125,000 per injection in the first year of use, brought in a whopping $203 million, compared with consensus estimates of $70 million, compiled by Evercore ISI.
Spinraza’s success helped Biogen lift its full-year adjusted profit forecast on Tuesday to a range of $20.80 per share to $21.40 per share, and revenue between $11.5 billion to $11.8 billion.
It had forecast earnings of $20.45 per share to $21.25 per share and revenue of $11.1 billion to $11.4 billion in January.
Spinraza is the latest addition to Biogen’s portfolio, but the bulk of the company’s revenue comes from its roster of multiple sclerosis (MS) treatments.
Sales of Tecfidera, Biogen’s leading MS drug, came in at $1.11 billion, just ahead of consensus estimates of $1.02 billion.
Revenue from its other MS drugs Avonex and Plegridy came in at $691 million, above consensus estimates of $666 million.
Biogen, which spun off its hemophilia business in February, said on Tuesday its MS drug business would continue to be the primary driver of future cash flow even as it the company aimed to develop more neuroscience drugs.
The drugmaker said it expected to keep aside up to $400 million a year for research and development by 2019.
Excluding items, Biogen earned $5.04 per share, handsomely beating estimates of $4.41 per share, according to Thomson Reuters I/B/E/S estimates.
Total revenue rose to 6.4 percent to $3.08 billion in the second quarter ended June 30, ahead of analysts’ estimates of $2.81 billion.
Net income attributable to the company fell to $862.8 million, or $4.07 per share, compared with $1.05 billion, or $4.79 per share, a year earlier, due to higher costs.
Share of Biogen were trading at $296.40 before the bell on Tuesday.
Reporting by Natalie Grover and Manas Mishra in Bengaluru; Editing by Arun Koyyur