10-QPeriod: Q2 FY2017

BIOGEN INC. Quarterly Report for Q2 Ended Jun 30, 2017

Filed July 25, 2017For Securities:BIIB

Summary

Biogen Inc.'s Q2 2017 filing shows total revenues of $3,078.4 million, a 6.4% increase year-over-year, driven by strong performance in TECFIDERA and the launch of SPINRAZA. However, net income attributable to Biogen Inc. decreased to $862.8 million from $1,049.8 million in the prior year's quarter, largely due to increased R&D expenses, including significant upfront and milestone payments for new drug candidates, and an acquired in-process R&D charge. The company completed the spin-off of its hemophilia business into Bioverativ Inc. in February 2017, which impacted year-over-year comparisons by eliminating hemophilia product revenues. Despite the decrease in net income, Biogen generated positive operating cash flow of $1,404.4 million for the first six months of 2017, and maintained a healthy cash position of $5,525.7 million in cash, cash equivalents, and marketable securities as of June 30, 2017.

Financial Highlights

51 data points
Beta

Revenue

$3.08B

88.1% Gross Margin

Net Income

$862.80M

28.0% Net Margin

EPS (Diluted)

$4.07

Total Assets

$21.76B

Cash & Equivalents

$1.17B

Free Cash Flow

$971.50M

Financial Statements
Beta
Revenue$3.08B
Cost of Revenue$366.20M
Gross Profit$2.71B
SG&A Expenses$429.80M
Operating Expenses$1.88B
Operating Income$1.20B
Interest Expense$63.60M
Net Income$862.80M
EPS (Basic)$4.07
EPS (Diluted)$4.07
Shares Outstanding (Basic)211.90M
Shares Outstanding (Diluted)212.20M

Key Highlights

  • 1Total revenues increased by 6.4% to $3,078.4 million for the three months ended June 30, 2017, compared to the same period in 2016.
  • 2Net income attributable to Biogen Inc. decreased by 17.8% to $862.8 million for the three months ended June 30, 2017, compared to $1,049.8 million in the prior year quarter.
  • 3Research and development expenses significantly increased by 68.3% for the quarter due to upfront payments for new drug candidates (BIIB092 and BIIB093).
  • 4The company completed the spin-off of its hemophilia business (Bioverativ Inc.) on February 1, 2017.
  • 5SPINRAZA, for Spinal Muscular Atrophy, received European Commission approval in June 2017 and continued its U.S. launch.
  • 6Cash, cash equivalents, and marketable securities totaled $5,525.7 million as of June 30, 2017.
  • 7Biogen repurchased $781.8 million of its common stock during the three months ended June 30, 2017, under its share repurchase program.

Frequently Asked Questions

The spin-off of Biogen's hemophilia business into Bioverativ Inc. on February 1, 2017, resulted in the elimination of hemophilia product revenues (ALPROLIX and ELOCTATE) from the current period's financial statements, negatively impacting year-over-year revenue comparisons for those specific product lines. However, it allowed Biogen to focus on its core neuroscience business.

Research and development expenses saw a substantial increase of 68.3% for the quarter primarily due to significant upfront and milestone payments made for new drug candidates. This includes a $300.0 million upfront payment for BMS-986168 (BIIB092) and a $120.0 million charge for acquired in-process R&D related to the acquisition of BIIB093 from Remedy Pharmaceuticals.

SPINRAZA, for Spinal Muscular Atrophy, received approval in the EU in June 2017 and Canada in June 2017, and was approved in Japan in July 2017. Biogen began recognizing revenue from SPINRAZA in the U.S. in Q4 2016 and in the rest of the world in Q1 2017, with revenues of $202.9 million reported in the U.S. for the second quarter of 2017.

Biogen entered into a settlement and license agreement with Forward Pharma in January 2017, obtaining U.S. and rest of world licenses for $1.25 billion. While Biogen prevailed in the U.S. intellectual property dispute in March 2017, Forward Pharma has appealed this decision. The settlement also involved amortization and impairment charges related to the acquired licenses.