10-QPeriod: Q2 FY2021

BIOGEN INC. Quarterly Report for Q2 Ended Jun 30, 2021

Filed July 22, 2021For Securities:BIIB

Summary

Biogen Inc.'s second-quarter 2021 results, filed on July 22, 2021, revealed a significant year-over-year decrease in total revenue and net income attributable to Biogen Inc. Total revenue for the quarter declined by 24.6% to $2.775 billion, driven by a 20.0% drop in product revenue to $2.236 billion. This decline was largely attributed to a substantial decrease in Multiple Sclerosis (MS) product revenue, particularly from TECFIDERA, due to increased generic competition in the U.S. market and the impact of COVID-19 related sales accelerations in the prior year. Revenue from anti-CD20 therapeutic programs also saw an 8.0% decrease, while other revenue experienced a significant 75.7% drop due to the absence of a prior-year licensing deal. Despite these revenue headwinds, the company incurred increased costs and expenses, notably due to substantial impairment charges for BIIB111 and BIIB112, alongside higher selling, general, and administrative expenses supporting the ADUHELM launch and other investments. This resulted in a sharp 68.8% decrease in diluted earnings per share to $2.99 for the quarter. Despite the revenue and profitability decline, Biogen's financial position remained robust with substantial cash reserves and a strengthening working capital position. The company continued its share repurchase program, repurchasing $450 million of its common stock in the quarter. The FDA's accelerated approval of ADUHELM in June 2021 marked a significant development, although the company anticipates a gradual patient uptake and ongoing reimbursement hurdles. The ongoing generic competition for TECFIDERA is expected to continue impacting future revenue and cash flow.

Financial Highlights

52 data points
Beta

Revenue

$2.77B

83.4% Gross Margin

Net Income

$448.50M

16.2% Net Margin

EPS (Diluted)

$2.99

Total Assets

$24.47B

Cash & Equivalents

$1.74B

Free Cash Flow

$1.16B

Financial Statements
Beta
Revenue$2.77B
Cost of Revenue$459.70M
Gross Profit$2.32B
SG&A Expenses$637.30M
Operating Expenses$2.19B
Operating Income$485.70M
Interest Expense$56.40M
Net Income$448.50M
EPS (Basic)$3.00
EPS (Diluted)$2.99
Shares Outstanding (Basic)149.70M
Shares Outstanding (Diluted)150.10M

Key Highlights

  • 1Total revenue decreased by 24.6% year-over-year to $2.775 billion for Q2 2021.
  • 2Product revenue declined by 20.0% to $2.236 billion, primarily due to a significant drop in Multiple Sclerosis (MS) product sales, especially TECFIDERA, driven by generic competition.
  • 3Diluted earnings per share attributable to Biogen Inc. decreased by 68.8% to $2.99 for Q2 2021 compared to $9.59 in Q2 2020.
  • 4Significant impairment charges totaling $541.6 million were recognized in Q2 2021 related to the BIIB111 and BIIB112 drug candidates.
  • 5ADUHELM received accelerated approval from the FDA in June 2021, with commercial launch activities commencing.
  • 6The company generated $1.996 billion in net cash flow from operating activities for the first six months of 2021.
  • 7Biogen repurchased $450.0 million of its common stock in Q2 2021 under its existing share repurchase program.

Frequently Asked Questions

The primary driver of the revenue decline was a significant decrease in Multiple Sclerosis (MS) product revenue, particularly from TECFIDERA. This was due to increased generic competition in the U.S. market and the impact of prior-year sales accelerations related to COVID-19.

In June 2021, ADUHELM received accelerated approval from the U.S. FDA for the treatment of Alzheimer's disease. Commercial launch activities commenced in the second quarter of 2021. Biogen anticipates gradual patient uptake and is undertaking a confirmatory trial as required by the FDA.

The significant increase in this expense category was primarily due to impairment charges of $350.0 million for BIIB111 and $191.6 million for BIIB112 recognized in the second quarter of 2021, following disappointing clinical trial results for these drug candidates.

Biogen continued its share repurchase program, repurchasing and retiring approximately 1.6 million shares of its common stock for approximately $450.0 million during the second quarter of 2021. Approximately $3.6 billion remained available under its $5.0 billion repurchase program as of June 30, 2021.