10-QPeriod: Q1 FY2015

BIOGEN INC. Quarterly Report for Q1 Ended Mar 31, 2015

Filed April 24, 2015For Securities:BIIB

Summary

Biogen Inc. reported a strong first quarter for 2015, demonstrating robust revenue growth and improved profitability compared to the prior year. Total revenues increased by 19.9% year-over-year, primarily driven by a significant surge in TECFIDERA sales, which grew by 63.1%, and the recent contributions from ALPROLIX and ELOCTATE. The company also saw a healthy increase in its share of profits from unconsolidated joint businesses, up 11.4%. Despite increased cost of sales and selling, general, and administrative expenses, overall costs and expenses saw a slight decrease due to lower amortization of acquired intangible assets. This, combined with strong revenue performance, led to a substantial increase in income from operations and net income. Diluted earnings per share more than doubled, reaching $3.49 compared to $2.02 in the prior year period. The company also made a strategic acquisition of Convergence Pharmaceuticals, strengthening its pipeline in neuropathic pain, and ended the quarter with a healthy cash position.

Financial Highlights

52 data points
Beta

Revenue

$2.56B

87.8% Gross Margin

Net Income

$822.50M

32.2% Net Margin

EPS (Diluted)

$3.49

Total Assets

$15.22B

Cash & Equivalents

$1.48B

Free Cash Flow

$635.20M

Financial Statements
Beta
Revenue$2.56B
Cost of Revenue$312.40M
Gross Profit$2.24B
SG&A Expenses$560.40M
Operating Expenses$1.44B
Operating Income$1.12B
Interest Expense$6.70M
Net Income$822.50M
EPS (Basic)$3.50
EPS (Diluted)$3.49
Shares Outstanding (Basic)235.00M
Shares Outstanding (Diluted)235.60M

Key Highlights

  • 1Total revenues increased by 19.9% to $2.55 billion for the three months ended March 31, 2015, compared to $2.13 billion for the same period in 2014.
  • 2Product revenues surged by 24.6% to $2.17 billion, primarily driven by a 63.1% increase in worldwide TECFIDERA revenues and the addition of ALPROLIX and ELOCTATE.
  • 3Diluted earnings per share attributable to Biogen Inc. increased significantly to $3.49, up from $2.02 in the prior year period.
  • 4Income from operations grew by 66.4% to $1.12 billion, reflecting strong revenue growth and controlled expense management.
  • 5The company completed the acquisition of Convergence Pharmaceuticals for $438.6 million, adding a clinical-stage pipeline for neuropathic pain.
  • 6Net cash provided by operating activities was $733.0 million, a substantial increase from $104.6 million in the prior year period.
  • 7Cash, cash equivalents, and marketable securities stood at $3.53 billion as of March 31, 2015, indicating a strong liquidity position.

Frequently Asked Questions

The primary driver of revenue growth was a significant increase in TECFIDERA sales, which rose by 63.1% year-over-year. Additionally, the recent launches of ALPROLIX and ELOCTATE contributed to the overall product revenue increase. Revenue from unconsolidated joint businesses also saw a healthy increase.

While total cost and expenses saw a slight decrease of 1.7% year-over-year, this was largely due to a 33.1% reduction in the amortization of acquired intangible assets and a 12.9% decrease in research and development expenses. Cost of sales increased by 11.9%, and selling, general, and administrative expenses rose by 9.5%, reflecting continued investment in commercial capabilities and sales activities.

Biogen acquired Convergence Pharmaceuticals for approximately $438.6 million. This acquisition strengthens Biogen's pipeline with a focus on developing product candidates for neuropathic pain, including a Phase 2 clinical candidate.

Biogen maintained a strong liquidity position, with cash, cash equivalents, and marketable securities totaling approximately $3.53 billion as of March 31, 2015. This was an increase from $3.32 billion at the end of 2014, primarily driven by strong operating cash flows.