10-QPeriod: Q1 FY2019

BIOGEN INC. Quarterly Report for Q1 Ended Mar 31, 2019

Filed April 24, 2019For Securities:BIIB

Summary

Biogen Inc. reported strong financial results for the first quarter of 2019, with total revenues increasing by 11.5% year-over-year to $3.49 billion. This growth was driven by a 6.2% increase in product revenues, primarily fueled by a significant 42.5% surge in SPINRAZA sales and a 36.8% rise in biosimilar revenues. Revenues from anti-CD20 therapeutic programs also saw a healthy 16.7% increase. Diluted earnings per share rose substantially by 29.1% to $7.15, reflecting improved profitability and effective cost management, despite an increase in total costs and expenses by 24.5%, largely due to a $115.5 million loss on assets held for sale related to the divestiture of manufacturing operations. Key strategic developments during the quarter included the proposed acquisition of gene therapy company Nightstar Therapeutics plc for approximately $800 million and the proposed divestiture of its Hillerød, Denmark manufacturing operations to FUJIFILM for up to $890 million. The company also announced a new $5.0 billion share repurchase program and continued its strategic investments in R&D, including a collaboration with Skyhawk Therapeutics for neurological disease treatments. While the discontinuation of the aducanumab Phase 3 trials presents a setback, Biogen demonstrated robust operational cash flow generation and a strong liquidity position with over $5.3 billion in cash, cash equivalents, and marketable securities.

Financial Highlights

51 data points
Beta

Revenue

$3.49B

82.7% Gross Margin

Net Income

$1.41B

40.4% Net Margin

EPS (Diluted)

$7.15

Total Assets

$26.45B

Cash & Equivalents

$2.24B

Free Cash Flow

$1.33B

Financial Statements
Beta
Revenue$3.49B
Cost of Revenue$602.00M
Gross Profit$2.89B
SG&A Expenses$567.70M
Operating Expenses$1.99B
Operating Income$1.50B
Interest Expense$47.90M
Net Income$1.41B
EPS (Basic)$7.17
EPS (Diluted)$7.15
Shares Outstanding (Basic)196.60M
Shares Outstanding (Diluted)197.00M

Key Highlights

  • 1Total revenues increased by 11.5% year-over-year to $3.49 billion.
  • 2Diluted earnings per share (EPS) increased by 29.1% to $7.15.
  • 3SPINRAZA revenue grew by 42.5%, and biosimilar revenue increased by 36.8%.
  • 4Announced proposed acquisition of Nightstar Therapeutics for ~$800 million and divestiture of Hillerød manufacturing operations for up to $890 million.
  • 5Recorded a $115.5 million loss on assets and liabilities held for sale related to the divested manufacturing operations.
  • 6Generated $1.46 billion in net cash flows from operating activities.
  • 7Announced a new $5.0 billion share repurchase program.

Frequently Asked Questions

The primary drivers of revenue growth were a significant increase in SPINRAZA sales (42.5% year-over-year) and strong performance from the biosimilar portfolio (36.8% year-over-year growth), alongside continued growth in revenues from anti-CD20 therapeutic programs.

Biogen recorded a loss of approximately $174.6 million in the first quarter of 2019 related to the proposed divestiture. This includes a pre-tax loss of $115.5 million on assets and liabilities held for sale, expected selling costs, and an estimated adverse commitment obligation. The company expects to receive up to $890 million in cash upon closing.

In March 2019, Biogen and Eisai announced the discontinuation of the global Phase 3 trials for aducanumab due to results from a futility analysis. This decision resulted in an approximately $45.0 million accrual for termination costs, net of expected reimbursement from Eisai.

Biogen maintained a strong liquidity position with over $5.3 billion in cash, cash equivalents, and marketable securities as of March 31, 2019. The company generated robust operating cash flow and announced a new $5.0 billion share repurchase program, indicating a commitment to returning capital to shareholders while continuing strategic investments.