10-QPeriod: Q2 FY2018

BIOGEN INC. Quarterly Report for Q2 Ended Jun 30, 2018

Filed July 24, 2018For Securities:BIIB

Summary

Biogen Inc. reported a solid second quarter for 2018, with total revenues increasing by 9.0% year-over-year to $3.36 billion. This growth was driven by a strong performance in its Spinal Muscular Atrophy (SMA) treatment, SPINRAZA, and revenue from its anti-CD20 therapeutic programs, particularly OCREVUS royalties, which saw a significant increase. Despite overall revenue growth, the company's Multiple Sclerosis (MS) franchise experienced a slight decline, primarily due to reduced unit sales volumes and pricing pressures in international markets. Research and development expenses also increased significantly, largely due to a substantial charge related to the collaboration with Ionis Pharmaceuticals. The company also completed its $5.0 billion share repurchase program during the quarter. Biogen's strategic acquisitions and collaborations indicate a forward-looking approach to expanding its pipeline in key neurological and neurodegenerative disease areas.

Financial Highlights

52 data points
Beta

Revenue

$3.36B

87.5% Gross Margin

Net Income

$866.60M

25.8% Net Margin

EPS (Diluted)

$4.18

Total Assets

$23.95B

Cash & Equivalents

$1.25B

Free Cash Flow

$912.50M

Financial Statements
Beta
Revenue$3.36B
Cost of Revenue$421.00M
Gross Profit$2.94B
SG&A Expenses$516.20M
Operating Expenses$2.14B
Operating Income$1.21B
Interest Expense$51.70M
Net Income$866.60M
EPS (Basic)$4.18
EPS (Diluted)$4.18
Shares Outstanding (Basic)207.10M
Shares Outstanding (Diluted)207.30M

Key Highlights

  • 1Total revenues increased by 9.0% to $3.36 billion in Q2 2018 compared to Q2 2017.
  • 2SPINRAZA revenue saw significant growth, driven by increased unit sales volumes globally.
  • 3Revenues from anti-CD20 therapeutic programs, including OCREVUS royalties, increased by 23.5%.
  • 4Multiple Sclerosis (MS) product revenues experienced a decline due to lower volumes and pricing pressures.
  • 5Research and Development (R&D) expenses increased by 23.2% primarily due to a large charge from the Ionis Pharmaceuticals collaboration.
  • 6Biogen completed its $5.0 billion share repurchase program.
  • 7The company made strategic acquisitions of BIIB100 and BIIB104, and entered into an option agreement for TMS-007, to bolster its pipeline.

Frequently Asked Questions

Biogen's revenue growth in Q2 2018 was primarily driven by strong performance in SPINRAZA, its treatment for Spinal Muscular Atrophy (SMA), and increased revenues from its anti-CD20 therapeutic programs, notably royalties from OCREVUS. Higher contract manufacturing revenues also contributed to the overall increase.

MS product revenues saw a decline primarily due to decreased unit sales volumes for TECFIDERA and Interferon products, coupled with pricing reductions in certain European countries. Increased competition from other MS treatments, including OCREVUS, also played a role.

The substantial increase in R&D expenses was primarily due to a significant net charge recognized upon closing the collaboration with Ionis Pharmaceuticals, Inc. This collaboration aims to develop novel antisense oligonucleotide drug candidates for neurological diseases.

Biogen completed its $5.0 billion share repurchase program authorized in July 2016 during the second quarter of 2018. A total of approximately 9.6 million shares were repurchased during the quarter.