10-QPeriod: Q2 FY2022

BIOGEN INC. Quarterly Report for Q2 Ended Jun 30, 2022

Filed July 20, 2022For Securities:BIIB

Summary

Biogen Inc. reported total revenue of $2.59 billion for the second quarter of 2022, a decrease of 6.7% year-over-year, driven by lower product sales, particularly in the Multiple Sclerosis (MS) segment due to generic competition for TECFIDERA and a decline in Interferon sales. Spinal Muscular Atrophy (SMA) drug SPINRAZA also saw a revenue decrease. Despite these headwinds, the company's net income attributable to Biogen Inc. saw a significant increase to $1.06 billion, largely due to a substantial pre-tax gain of $1.5 billion from the sale of its equity interest in Samsung Bioepis. The company also announced cost-saving initiatives expected to yield significant reductions. Biogen's financial position remains strong with approximately $5.9 billion in cash, cash equivalents, and marketable securities as of June 30, 2022.

Financial Highlights

51 data points
Beta

Revenue

$2.59B

81.3% Gross Margin

Net Income

$1.06B

40.9% Net Margin

EPS (Diluted)

$7.24

Total Assets

$25.08B

Cash & Equivalents

$2.65B

Free Cash Flow

$699.60M

Financial Statements
Beta
Revenue$2.59B
Cost of Revenue$484.00M
Gross Profit$2.11B
SG&A Expenses$572.60M
Operating Expenses$1.32B
Interest Expense$65.80M
Net Income$1.06B
EPS (Basic)$7.25
EPS (Diluted)$7.24
Shares Outstanding (Basic)145.90M
Shares Outstanding (Diluted)146.20M

Key Highlights

  • 1Total revenue decreased by 6.7% year-over-year to $2.59 billion in Q2 2022.
  • 2Product revenue declined by 8.1% to $2.05 billion, primarily impacted by lower sales of TECFIDERA (MS) due to generic competition and a decrease in SPINRAZA (SMA) sales.
  • 3Net income attributable to Biogen Inc. surged to $1.06 billion, significantly boosted by a $1.5 billion pre-tax gain from the sale of its Samsung Bioepis equity interest.
  • 4The company announced cost-reduction initiatives, including workforce reductions and elimination of ADUHELM commercial infrastructure, aiming for substantial savings.
  • 5Cash, cash equivalents, and marketable securities increased to $5.9 billion as of June 30, 2022.
  • 6Biogen repurchased $500 million of its common stock in Q2 2022 under its existing share repurchase program.

Frequently Asked Questions

The primary driver for the revenue decline was lower product sales, especially within the Multiple Sclerosis (MS) portfolio. TECFIDERA experienced a significant drop due to the entry of generic competitors in the U.S. market, and Interferon-based MS therapies also saw decreased sales as patients transitioned to newer treatments. Additionally, SPINRAZA sales decreased due to increased competition and timing of shipments.

The sale of Biogen's 49.9% equity interest in Samsung Bioepis was a significant event, generating approximately $1.0 billion in cash at closing and an expected $1.3 billion in deferred payments. This transaction resulted in a substantial pre-tax gain of $1.5 billion, which significantly boosted net income for the quarter, offsetting the revenue decline from core products.

Following the Centers for Medicare and Medicaid Services' final National Coverage Determination (NCD) that restricts Medicare coverage for anti-amyloid treatments to patients enrolled in approved clinical trials, Biogen expects demand for ADUHELM to be minimal. As a result, the company has substantially eliminated its commercial infrastructure for ADUHELM and is focusing on managing patient access programs for those currently on treatment.

Biogen announced cost-reduction initiatives in late 2021 and mid-2022, which include workforce reductions (primarily in its Alzheimer's infrastructure), consolidation of real estate locations, and operating efficiencies across R&D and SG&A functions. The company anticipates incurring $130-$150 million in restructuring charges related to these measures.