Biogen’s 4Q Earnings Miss Street Estimates; Shares Fall 5.2%

Biogen’s shares dropped 5.2% on Feb. 3 as the biotech company’s fourth-quarter earnings fell short of analysts’ estimates.

The company reported 4Q non-GAAP diluted earnings per share of $4.58, that missed analysts’ estimates of $4.87. Meanwhile, revenues declined 22% year-on-year to $2.9 million, but beat consensus estimates of $2.8 million.

Biogen’s (BIIB) CEO, Michel Vounatsos said, “In 2020 Biogen executed well and maintained leadership across our core businesses in multiple sclerosis (MS), spinal muscular atrophy (SMA), and biosimilars, while simultaneously making significant progress towards building a multi-franchise portfolio through both internal pipeline developments and multiple new strategic collaborations.”

The company also provided financial guidance for FY21. Biogen expects to generate revenues of between $10.5 billion to $10.7 billion this year. Non-GAAP diluted EPS is forecasted to come in at between $17 and $18.50. Capital spending is projected to be in a range of between $375 million to $425 million.

Biogen noted that the financial guidance assumes that its experimental drug for Alzheimer’s disease, aducanumab will be approved by the US Food and Drug Administration (FDA) by June 7 of this year. The company also stated that if aducanumab is approved, it expects a launch immediately but anticipates to earn only modest revenues from the drug in FY21. (See Biogen stock analysis on TipRanks )

“Although we expect a financial reset in 2021 primarily due to the entry of TECFIDERA generics, we believe that 2021 has the potential to be a transformative year for our pipeline with an anticipated regulatory decision in the U.S. on aducanumab for Alzheimer’s disease in June as well as pivotal trial readouts in postpartum depression, major depressive disorder, ALS [Lou Gehrig’s disease], and choroideremia,” Vounatsos added.

Following the 4Q results, JP Morgan analyst Cory Kasimov maintained a Hold rating on the stock with a price target of $269. Kasimov wrote in a note to investors, “Today’s 4Q print and, more importantly, 2021 guide highlight the precarious position of Biogen’s existing commercial portfolio as the revenue and earnings numbers are well below prevailing expectations. It also foreshadows just how dismal things could get if key upcoming regulatory and pipeline events don’t go their way.”

Furthermore, Kasimov said, “That said, there is a lot of optionality in this story with the aducanumab Alzheimer’s PDUFA [prescription drug user fee act] obviously at the forefront… 1H21 is clearly setting up to be a make-or-break period for BIIB.”

The rest of the Street is in line with Kasimov’s outlook with a Hold consensus rating. That’s based on 10 analysts recommending a Buy, 9 analysts suggesting a Hold, and 5 analysts recommending a Sell. The average analyst price target of $296.58 implies 12.7% upside potential to current levels.

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