10-QPeriod: Q1 FY2021

BIOGEN INC. Quarterly Report for Q1 Ended Mar 31, 2021

Filed April 22, 2021For Securities:BIIB

Summary

Biogen Inc. reported a significant decline in revenue and net income for the first quarter of 2021 compared to the same period in 2020. Total revenue decreased by 23.8% to $2.7 billion, driven primarily by a 23.9% drop in product revenue, largely due to the impact of generic competition for TECFIDERA and a decline in Multiple Sclerosis (MS) product revenue. Despite the revenue decrease, total costs and expenses remained relatively flat, showing a slight increase of 0.3%. However, the substantial drop in revenue led to a significant decrease in net income and diluted earnings per share, which fell by 66.7% to $2.69 per share. The company also highlighted ongoing R&D investments and potential headwinds from the aducanumab review and ongoing litigation. Key financial developments include a substantial decrease in cash flow from operations year-over-year, a significant share repurchase program executed in the first quarter, and a debt exchange offer completed in February 2021. The company is actively managing its financial resources and strategic initiatives, including investments in manufacturing capacity.

Financial Highlights

51 data points
Beta

Revenue

$2.69B

82.3% Gross Margin

Net Income

$410.20M

15.2% Net Margin

EPS (Diluted)

$2.69

Total Assets

$23.85B

Cash & Equivalents

$1.22B

Free Cash Flow

$676.40M

Financial Statements
Beta
Revenue$2.69B
Cost of Revenue$478.10M
Gross Profit$2.22B
SG&A Expenses$595.00M
Operating Expenses$1.72B
Operating Income$973.90M
Interest Expense$64.70M
Net Income$410.20M
EPS (Basic)$2.70
EPS (Diluted)$2.69
Shares Outstanding (Basic)151.90M
Shares Outstanding (Diluted)152.30M

Key Highlights

  • 1Total revenue for Q1 2021 was $2.7 billion, a decrease of 23.8% compared to $3.5 billion in Q1 2020.
  • 2Product revenue declined by 23.9% to $2.2 billion, mainly due to a 30.0% decrease in Multiple Sclerosis (MS) product revenue, impacted by TECFIDERA generic competition.
  • 3Revenue from anti-CD20 therapeutic programs decreased by 25.2% to $389.0 million, attributed to RITUXAN biosimilar competition.
  • 4Diluted earnings per share (EPS) attributable to Biogen Inc. significantly decreased by 66.7% to $2.69 in Q1 2021 from $8.08 in Q1 2020.
  • 5Research and Development (R&D) expenses increased by 8.0% to $514.2 million, driven by investments in key pipeline programs like aducanumab and zuranolone.
  • 6The company repurchased and retired approximately 2.2 million shares of common stock for $600.0 million under its 2020 Share Repurchase Program.
  • 7An impairment charge of $44.3 million was recognized related to vixotrigine for the potential treatment of trigeminal neuralgia.

Frequently Asked Questions

The primary reason for the significant decrease in Biogen's revenue in Q1 2021 was the impact of multiple TECFIDERA generic entrants in the U.S. market, which led to a substantial decrease in TECFIDERA demand and higher discounts and allowances. This, combined with a general decline in MS product revenue and competition impacting RITUXAN, contributed to the overall revenue drop.

Biogen's profitability saw a significant decline in Q1 2021 compared to Q1 2020. Net income attributable to Biogen Inc. fell from $1.4 billion to $410.2 million, resulting in a 66.7% decrease in diluted earnings per share to $2.69.

Biogen completed the submission of a Biologics License Application (BLA) for aducanumab to the FDA in July 2020. The FDA granted Priority Review with an initial action date of March 7, 2021. The review period was extended by three months, with an updated PDUFA action date of June 7, 2021. The FDA considered additional analyses and clinical data submitted by Biogen as a Major Amendment, necessitating further review.

The increase in R&D expenses was primarily driven by increased spending related to the EMBARK redosing study for aducanumab, the development of BIIB125 (zuranolone) for major depressive disorder and postpartum depression in collaboration with Sage Therapeutics, and BIIB124 (SAGE-324) for essential tremor, also in collaboration with Sage.