10-QPeriod: Q3 FY2021

BIOGEN INC. Quarterly Report for Q3 Ended Sep 30, 2021

Filed October 20, 2021For Securities:BIIB

Summary

Biogen Inc. reported a notable decline in revenue and earnings for the third quarter and first nine months of 2021 compared to the prior year, largely driven by increased generic competition for its multiple sclerosis (MS) drug, TECFIDERA, and biosimilar competition impacting its anti-CD20 therapeutic programs. Total revenue decreased by 17.7% to $2.8 billion for the third quarter and 22.1% to $8.2 billion for the nine-month period. Diluted earnings per share (EPS) also saw a significant drop, falling 50.2% to $2.22 per share for the third quarter. Despite the revenue decline, Biogen continued to invest in its pipeline, with a significant upfront payment for a new collaboration. The company also made progress on its manufacturing capabilities with its Solothurn, Switzerland facility. Notably, the company received an accelerated approval for its Alzheimer's drug, ADUHELM, in June 2021, though early commercial uptake is expected to be gradual. The company's financial position remains solid with approximately $3.9 billion in cash, cash equivalents, and marketable securities as of September 30, 2021. However, investors should monitor the impact of ongoing challenges, including generic competition, pricing pressures, and the commercialization trajectory of ADUHELM.

Financial Highlights

53 data points
Beta

Revenue

$2.78B

81.6% Gross Margin

Net Income

$329.20M

11.8% Net Margin

EPS (Diluted)

$2.22

Total Assets

$23.81B

Cash & Equivalents

$1.54B

Free Cash Flow

$763.30M

Financial Statements
Beta
Revenue$2.78B
Cost of Revenue$511.80M
Gross Profit$2.27B
SG&A Expenses$654.10M
Operating Expenses$2.49B
Operating Income$794.00M
Interest Expense$66.30M
Net Income$329.20M
EPS (Basic)$2.22
EPS (Diluted)$2.22
Shares Outstanding (Basic)148.00M
Shares Outstanding (Diluted)148.60M

Key Highlights

  • 1Total revenue for Q3 2021 decreased by 17.7% year-over-year to $2.8 billion, primarily due to declines in MS product revenue (-18.0%) and anti-CD20 therapeutic programs revenue (-25.8%).
  • 2Diluted EPS attributable to Biogen Inc. for Q3 2021 was $2.22, a 50.2% decrease from $4.46 in Q3 2020.
  • 3Research and development expenses decreased significantly by 38.4% in Q3 2021, largely due to a large upfront payment in the prior year's comparable quarter for a collaboration with Denali Therapeutics.
  • 4ADUHELM, Biogen's Alzheimer's drug, received accelerated approval from the FDA in June 2021, with initial commercial sales beginning in Q2 2021. However, patient uptake is expected to be gradual.
  • 5Biogen repurchased approximately $750 million of its common stock during Q3 2021 under its ongoing share repurchase program.
  • 6The company ended the period with approximately $3.9 billion in cash, cash equivalents, and marketable securities, indicating a strong liquidity position.
  • 7Significant impairment charges were recorded for BIIB111 and BIIB112, leading to their remaining book values being reduced to zero.

Frequently Asked Questions

The primary driver for the revenue decline in the third quarter of 2021 was the significant impact of generic competition for TECFIDERA in the U.S. market, leading to an 18.0% decrease in MS product revenue. Additionally, biosimilar competition negatively affected revenue from anti-CD20 therapeutic programs, which decreased by 25.8%.

Biogen has appealed judgments in patent infringement proceedings related to TECFIDERA. However, the company acknowledges that multiple generic entrants in the U.S. market have significantly reduced TECFIDERA's revenue and expects this trend to continue as long as generic competition persists. In the EU, the company is appealing a decision that could impact regulatory data protection for TECFIDERA.

Biogen received accelerated approval for ADUHELM in June 2021. Commercialization in the U.S. began in the second quarter of 2021. The company expects patient uptake to be gradual due to factors such as appropriate patient selection, a complex diagnostic pathway, healthcare provider readiness, and uncertainty around Medicare reimbursement, with a National Coverage Determination expected by Q2 2022. The company is also pursuing regulatory approvals in Europe and Japan.

Biogen reported significant impairment charges for BIIB111 and BIIB112, leading to the suspension of further development and reduction of their book values to zero. These impairments were related to studies that did not meet their primary endpoints. The company also announced topline results for BIIB067 (tofersen) where the primary endpoint was not met, and they are engaging with regulators on next steps. On a positive note, lecanemab received Breakthrough Therapy designation in June 2021, and Eisai initiated a rolling submission for its BLA.