10-QPeriod: Q3 FY2018

BIOGEN INC. Quarterly Report for Q3 Ended Sep 30, 2018

Filed October 23, 2018For Securities:BIIB

Summary

Biogen Inc. reported strong financial results for the third quarter of 2018, demonstrating robust revenue growth and increased profitability. Total revenues rose by 11.7% year-over-year to $3.44 billion, driven by solid performance in key product areas and significant growth in revenues from anti-CD20 therapeutic programs. Product revenues increased by 6.0%, largely fueled by higher sales of SPINRAZA and BENEPALI, although MS product revenues saw a slight decline primarily due to lower Interferon sales. Net income attributable to Biogen Inc. saw a substantial increase of 17.8% to $1.44 billion, translating to diluted earnings per share of $7.15, a 23.5% increase from the prior year period. This improved profitability was aided by a lower effective tax rate, benefiting from the Tax Cuts and Jobs Act of 2017. The company also continued its strategic investments, including acquisitions and partnerships, to bolster its pipeline for neurological and neurodegenerative diseases. Cash flow from operations remained strong, supporting share repurchases and strategic investments, indicating a healthy financial position.

Financial Highlights

53 data points
Beta

Revenue

$3.44B

86.6% Gross Margin

Net Income

$1.44B

42.0% Net Margin

EPS (Diluted)

$7.15

Total Assets

$25.49B

Cash & Equivalents

$2.39B

Free Cash Flow

$1.57B

Financial Statements
Beta
Revenue$3.44B
Cost of Revenue$460.80M
Gross Profit$2.98B
SG&A Expenses$497.70M
Operating Expenses$1.74B
Operating Income$1.70B
Interest Expense$49.00M
Net Income$1.44B
EPS (Basic)$7.17
EPS (Diluted)$7.15
Shares Outstanding (Basic)201.40M
Shares Outstanding (Diluted)201.90M

Key Highlights

  • 1Total revenues increased by 11.7% to $3.44 billion for Q3 2018 compared to Q3 2017.
  • 2Product revenues grew by 6.0% to $2.78 billion, driven by SPINRAZA and BENEPALI, with MS product revenues seeing a slight decline.
  • 3Revenues from anti-CD20 therapeutic programs surged by 25.9% to $511.7 million, largely due to higher OCREVUS royalties.
  • 4Diluted earnings per share increased by 23.5% to $7.15 for Q3 2018.
  • 5Net income attributable to Biogen Inc. rose by 17.8% to $1.44 billion.
  • 6Amortization of acquired intangible assets increased significantly due to impairment charges related to the vixotrigine program ($189.3 million).
  • 7The company repurchased $3.0 billion of its common stock under its 2016 Share Repurchase Program during the nine months ended September 30, 2018.

Frequently Asked Questions

Biogen's key revenue drivers in Q3 2018 included strong performance from SPINRAZA (Spinal Muscular Atrophy) and BENEPALI (biosimilar), which contributed to a 6.0% increase in overall product revenues. Additionally, revenues from anti-CD20 therapeutic programs, primarily driven by OCREVUS royalties, saw a significant increase of 25.9%.

Biogen's profitability improved significantly. Diluted earnings per share increased by 23.5% to $7.15, and net income attributable to Biogen Inc. rose by 17.8% to $1.44 billion. This improvement was partly due to a lower effective tax rate following the Tax Cuts and Jobs Act of 2017.

A notable expense impacting operations was the amortization of acquired intangible assets, which increased substantially due to impairment charges of $189.3 million related to the vixotrigine program. Research and development expenses also increased by 13.8% as the company continued to invest in its pipeline.

Biogen completed its $5.0 billion 2016 Share Repurchase Program by June 30, 2018, repurchasing $3.0 billion of stock during the first nine months of 2018. In August 2018, the company authorized a new $3.5 billion share repurchase program, under which no shares were repurchased during the third quarter of 2018.