Biogen’s Leqembi Soars, but Profit Forecast Falls Short
Biogen, a renowned biotech company, recently released its fourth-quarter financial results, exceeding revenue and profit expectations thanks to cost-saving efforts and successful new products, notably their groundbreaking Alzheimer’s treatment Leqembi. However, despite this positive performance, the company’s profit outlook for the upcoming year fell below Wall Street’s projections, disappointing investors and analysts alike.
The company’s full-year 2025 adjusted earnings forecast of $15.25 to $16.25 per share failed to meet the anticipated $16.34 per share, primarily due to a foreign exchange headwind of 35 cents per share, as reported by LSEG. Additionally, Biogen anticipates a decline in revenue by a “mid-single digit” percentage in 2025 compared to the previous year, largely driven by decreasing sales of their multiple sclerosis products facing generic competition.
Amidst this downward trend, the company remains optimistic about the growth potential of Leqembi, alongside its new treatments for rare diseases and depression, to counterbalance the declining revenue. Leqembi, in particular, performed exceptionally well, generating $87 million in revenue for the fourth quarter, with $50 million in sales in the U.S., far surpassing analysts’ expectations.
Leqembi’s success stems from its status as the second drug proven to slow Alzheimer’s progression to gain approval in the U.S. in 2023. Despite its promising trajectory, the drug’s launch faced obstacles such as diagnostic test requirements, regular brain scans, and the scarcity of neurologists, hampering its widespread adoption.
Detailed Financial Results and Future Projections
For the fourth quarter, Biogen reported earnings per share of $3.44, adjusted, exceeding the expected $3.35 per share, and revenue of $2.46 billion, outperforming the projected $2.40 billion. These figures marked a 3% increase from the same period the previous year. The company’s net income for the quarter totaled $266.8 million, or $1.83 per share, compared to $249.7 million and $1.71 per share a year earlier.
Biogen’s strategic cost-cutting initiative, initiated in 2023, aims to achieve $1 billion in gross savings, translating to $800 million in net savings by the end of 2025. This cost-saving measure underscores the company’s commitment to enhancing operational efficiency and driving long-term profitability.
Exciting Developments in Biogen’s Pipeline
In addition to Leqembi’s stellar performance, Biogen’s new drug Skyclarys, acquired through the Reata Pharmaceuticals deal in July 2023, posted impressive sales of $102 million in the fourth quarter, nearly doubling its revenue from the previous year. Skyclarys gained FDA approval in 2023 as the first treatment for Friedreich’s ataxia, a rare degenerative disease affecting children as young as 5, showcasing Biogen’s commitment to pioneering therapies for unmet medical needs.
Another notable addition to Biogen’s portfolio, Zurzuvae, the first pill designed for postpartum depression, reported fourth-quarter sales of $22.9 million. While slightly below analysts’ expectations, this innovative treatment represents a significant advancement in mental health care, addressing a critical area with limited therapeutic options.
Despite these successes, Biogen faced an 8% decline in fourth-quarter sales from its multiple sclerosis treatments, underscoring the competitive landscape and evolving market dynamics in the pharmaceutical industry. This dip in revenue signals the company’s need to diversify its product offerings and prioritize innovation to sustain growth and profitability in the long run.
Partnerships and Collaborations Driving Future Growth
On a positive note, Biogen recently secured a strategic partnership with Royalty Pharma, a prominent investor in the biotech sector, to provide $250 million in research and development funding for litifilimab, a key drug in Biogen’s pipeline targeting lupus. This collaboration underscores the industry’s collaborative nature, leveraging expertise and resources to accelerate drug development and bring life-changing therapies to patients in need.
In conclusion, Biogen’s success with Leqembi and other innovative treatments reflects the company’s commitment to advancing healthcare through cutting-edge research and development. While challenges persist in the form of declining revenue from existing products, Biogen’s strategic initiatives, robust pipeline, and strategic partnerships position it well for sustained growth and success in the competitive biopharmaceutical landscape.
