10-KPeriod: FY2022

BIOGEN INC. Annual Report, Year Ended Dec 31, 2022

Filed February 15, 2023For Securities:BIIB

Summary

Biogen Inc.'s (BIIB) 2022 10-K filing highlights a challenging year marked by a 7.4% decrease in total revenue, primarily driven by a significant decline in Multiple Sclerosis (MS) product revenue due to increased generic competition for TECFIDERA. Despite this, the company achieved a substantial increase in diluted earnings per share due to a significant gain from the sale of its equity interest in Samsung Bioepis and various cost-saving initiatives, including workforce reductions and the substantial elimination of its ADUHELM commercial infrastructure. The company is strategically advancing its pipeline with a focus on neurology, neuropsychiatry, specialized immunology, and rare diseases. Key developments include the accelerated FDA approval of LEQEMBI (lecanemab) for Alzheimer's disease in collaboration with Eisai, and positive progress with zuranolone for major depressive disorder and postpartum depression, which has received priority review from the FDA. These developments signal potential future growth drivers, offsetting the ongoing pressures in established MS and biosimilar markets.

Financial Highlights

53 data points
Beta

Revenue

$10.17B

77.6% Gross Margin

Net Income

$3.05B

30.0% Net Margin

EPS (Diluted)

$20.87

Total Assets

$24.55B

Cash & Equivalents

$3.42B

Free Cash Flow

$1.14B

Financial Statements
Beta
Revenue$10.17B
Cost of Revenue$2.28B
Gross Profit$7.90B
SG&A Expenses$2.40B
Operating Expenses$6.58B
Interest Expense$246.60M
Net Income$3.05B
EPS (Basic)$20.96
EPS (Diluted)$20.87
Shares Outstanding (Basic)145.30M
Shares Outstanding (Diluted)146.00M

Key Highlights

  • 1Total revenue decreased by 7.4% to $10.17 billion in 2022, primarily due to a 9.7% decline in product revenue, driven by a 10.9% drop in MS product revenue, largely attributed to generic competition for TECFIDERA.
  • 2Diluted earnings per share (EPS) increased significantly by 100.7% to $20.87 in 2022, compared to $10.40 in 2021, largely due to a $1.5 billion pre-tax gain from the sale of its Samsung Bioepis equity interest and substantial cost-saving initiatives.
  • 3Significant progress in Alzheimer's disease treatment with the January 2023 accelerated FDA approval of LEQEMBI (lecanemab), co-developed with Eisai, and the submission for traditional approval.
  • 4Zuranolone, a potential treatment for major depressive disorder and postpartum depression, received Priority Review from the FDA with an action date of August 5, 2023.
  • 5The company is implementing cost-reduction measures aiming for approximately $1.0 billion in expense savings through workforce reductions, infrastructure streamlining, and operating efficiency improvements.
  • 6Despite competition, SPINRAZA revenue is anticipated to remain relatively flat in 2023, with moderate growth in the U.S. and expansion in emerging markets expected to offset increased competition.
  • 7The company sold its 49.9% equity interest in Samsung Bioepis for approximately $1.0 billion in cash at closing, with deferred payments totaling $1.3 billion expected over two years.

Frequently Asked Questions

Biogen's primary revenue drivers include its Multiple Sclerosis (MS) franchise (TECFIDERA, VUMERITY, AVONEX, PLEGRIDY, TYSABRI) and SPINRAZA for Spinal Muscular Atrophy (SMA). However, the company is facing significant challenges in its MS segment, particularly with TECFIDERA, which has experienced substantial revenue decline due to the entry of generic competitors in North America, Brazil, and certain EU countries. The biosimilar business also saw a revenue decrease due to unfavorable pricing and foreign currency impacts.

The most notable pipeline development is LEQEMBI (lecanemab) for Alzheimer's disease, which received accelerated FDA approval in January 2023 and has had its supplemental BLA submitted for traditional approval. Additionally, zuranolone for major depressive disorder and postpartum depression has completed rolling submission to the FDA and received Priority Review, with an action date set for August 5, 2023. Other pipeline advancements include drugs for ALS (tofersen) and lupus (litifilimab and dapirolizumab pegol).

The Centers for Medicare and Medicaid Services (CMS) final National Coverage Decision (NCD) in April 2022, which limited Medicare coverage for anti-amyloid treatments like ADUHELM to patients enrolled in approved clinical trials, significantly reduced forecasted demand. This led Biogen to record approximately $275 million in charges for inventory write-offs and purchase commitments, as well as $111 million in idle capacity charges related to ADUHELM. Consequently, Biogen has substantially eliminated its commercial infrastructure for ADUHELM, retaining minimal resources for patient access programs.

Biogen announced and began implementing cost-reduction measures in late 2021 and throughout 2022, aiming for approximately $1.0 billion in expense savings. These initiatives include workforce reductions, consolidating real estate, and improving operating efficiencies. The company also completed the sale of its 49.9% equity interest in Samsung Bioepis for approximately $1.0 billion in cash at closing, with further payments expected, bolstering its financial position.