Biogen raises forecast as Leqembi sales surge in Q2

Biogen announced strong second-quarter results on Thursday, driven by the growing adoption of its Alzheimer's drug, Leqembi. Despite this positive news, the company's shares fell by approximately 2.3%, reflecting concerns about the sustainability of this growth. Leqembi, an anti-amyloid antibody developed in partnership with Eisai, achieved around $40 million in global sales for the quarter, exceeding analyst predictions of $30 million to $35 million. This suggests that the drug is gaining momentum after a slow start due to diagnostic requirements and the need for regular brain scans.

However, some analysts are cautious about Leqembi's long-term prospects. Brian Abrahams from RBC Capital Markets noted that $10 million of the quarter's sales came from outside the U.S. Considering a recent EU regulatory panel's recommendation against Leqembi, future international sales may be limited.

On the bright side, Biogen's overall quarterly performance was robust, supported by sales from its new product portfolio. This success led the company to increase its full-year guidance. "All of the launches are in line with or ahead of expectations," said Biogen CEO Chris Viehbacher. He noted continued positive momentum in new product launches and expressed optimism about key products heading into the third quarter.

Among Biogen's new products, its rare disease franchise generated $534.1 million, with Skyclarys alone accounting for $100 million. This figure surpassed analyst estimates of $92.3 million. Skyclarys, a treatment for Friedreich ataxia, was acquired through Biogen's purchase of Reata Pharmaceuticals last year. Additionally, Zurzuvae, a medicine for postpartum depression developed with Sage Therapeutics, earned $14.9 million, exceeding expectations of $11 million.

The company's spinal muscular atrophy drug, Spinraza, also performed well, with sales reaching $429.1 million, above the analyst range of $407 million to $412 million. However, Biogen's new ALS treatment, Qalsody, fell short with $5 million in sales, missing forecasts of $6 million to $7 million.

Biogen's multiple sclerosis franchise saw a 5% decline in sales, totaling $1.15 billion. Despite this drop, some MS drugs, like Tecfidera, posted stronger-than-expected sales of $252.2 million for the quarter.

Given these results, Biogen raised its full-year adjusted earnings guidance to a range of $15.75 to $16.25 per share, compared to the previous forecast of $15 to $16 per share. The company also updated its 2024 sales outlook, now expecting a low-single-digit percentage decline, an improvement from the earlier projection of a low- to mid-single-digit percentage decrease.

Biogen remains committed to its cost-cutting measures, aiming to achieve around $1 billion in gross cost savings, or $800 million in net savings, by the end of 2025. "While you can see a significant decline in our operating expenses, we have at the same time, been able to invest massively in our new product launches and in those R&D projects that we think are the most important," stated Viehbacher.

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