10-QPeriod: Q1 FY2022

BIOGEN INC. Quarterly Report for Q1 Ended Mar 31, 2022

Filed May 3, 2022For Securities:BIIB

Summary

Biogen Inc. reported total revenue of $2,531.8 million for the first quarter of 2022, a 6.0% decrease from $2,694.0 million in the same period of 2021. This decline was primarily driven by a decrease in product revenue, notably from Multiple Sclerosis (MS) treatments like Interferon and TECFIDERA, impacted by competition and generic entries. SPINRAZA revenue also saw a decline due to increased competition and unfavorable foreign currency impacts. However, revenue from anti-CD20 therapeutic programs saw a slight increase, primarily due to higher royalty revenue from OCREVUS. Despite the revenue decrease, the company incurred significant restructuring charges and cost of sales increases, largely due to inventory write-offs and idle capacity charges related to ADUHELM, totaling $275.0 million and $45.0 million respectively in the first quarter of 2022. These factors, combined with increased SG&A expenses, led to a substantial decrease in net income attributable to Biogen Inc. to $303.8 million from $410.2 million in the prior year, and diluted EPS fell to $2.06 from $2.69.

Financial Highlights

52 data points
Beta

Revenue

$2.53B

70.2% Gross Margin

Net Income

$303.80M

12.0% Net Margin

EPS (Diluted)

$2.06

Total Assets

$23.61B

Cash & Equivalents

$1.75B

Free Cash Flow

$103.90M

Financial Statements
Beta
Revenue$2.53B
Cost of Revenue$753.90M
Gross Profit$1.78B
SG&A Expenses$634.90M
Operating Expenses$2.18B
Operating Income$610.70M
Interest Expense$66.10M
Net Income$303.80M
EPS (Basic)$2.06
EPS (Diluted)$2.06
Shares Outstanding (Basic)147.10M
Shares Outstanding (Diluted)147.60M

Key Highlights

  • 1Total revenue decreased by 6.0% to $2,531.8 million in Q1 2022 compared to Q1 2021.
  • 2Product revenue declined by 6.6% to $2,066.3 million, primarily due to lower sales of Multiple Sclerosis (MS) products (Interferon, TECFIDERA) and SPINRAZA.
  • 3Significant inventory write-offs and idle capacity charges related to ADUHELM in Q1 2022 resulted in a substantial increase in cost of sales.
  • 4Net income attributable to Biogen Inc. decreased by 26.2% to $303.8 million.
  • 5Diluted earnings per share decreased by 23.4% to $2.06.
  • 6The company announced cost-reduction measures for 2022, expecting to incur restructuring charges between $100.0 million and $150.0 million.
  • 7The Centers for Medicare and Medicaid Services (CMS) finalized its National Coverage Decision (NCD) for anti-amyloid treatments, significantly limiting future demand for ADUHELM and leading to substantial inventory write-downs.

Frequently Asked Questions

Biogen's revenue declined primarily due to lower sales of key products like TECFIDERA and Interferon for Multiple Sclerosis, driven by increased generic competition and patients transitioning to alternative therapies. Sales of SPINRAZA also decreased due to heightened competition and timing of shipments. The significant ADUHELM inventory write-offs and idle capacity charges also impacted overall financial performance, though not directly revenue.

The final National Coverage Decision (NCD) from CMS for anti-amyloid treatments, restricting Medicare coverage for ADUHELM to patients in clinical trials, has drastically reduced expected demand for ADUHELM. Consequently, Biogen recorded approximately $275.0 million in inventory write-offs and $45.0 million in idle capacity charges in Q1 2022, significantly increasing cost of sales and negatively impacting net income. The company also plans to substantially eliminate its commercial infrastructure for ADUHELM.

Biogen is implementing cost-saving initiatives expected to result in restructuring charges of $100-150 million, focusing on workforce reductions and operational efficiencies. The company is also managing its product portfolio, with VUMERITY expected to grow and efforts to navigate competition for other MS drugs. Furthermore, strategic adjustments are being made regarding ADUHELM's commercialization following the CMS decision.

Biogen completed the sale of its equity in Samsung Bioepis to Samsung BioLogics in April 2022, receiving approximately $1.0 billion in cash at closing and an additional $1.3 billion in deferred payments. This transaction is expected to provide significant liquidity. Biogen also has an ongoing agreement for the commercialization of biosimilar products developed by Samsung Bioepis.