Biogen Could Engage In $1B-$2B Deals To Fill Revenue Shortfall Gaps, Analyst Says

Tuesday, Biogen Inc BIIB posted fourth-quarter 2023 sales of $2.39 billion, missing the consensus of $2.46 billion, down 6% Y/Y and 5% at constant currency (CC).

Adjusted EPS of $2.95, down 27%, missing the consensus of $3.18.

Biogen’s partner, Eisai Co Ltd ESALY, has faced a delay in reaching the 10,000-patient mark for Leqembi despite strong demand. 

In its third quarter financial results, Eisai disclosed that as of January 26, 2,000 patients were on treatment, with an estimated four times as many on a waiting list. 

Logistics challenges are evident in the number of patients on the waiting list, but Eisai’s management sees this as a positive sign of healthy patient demand. 

Biogen is now supporting Eisai’s U.S. promotional efforts, aiming to expand the U.S. field force by about 30%. 

The slow Leqembi launch limits stock growth, and uncertainties persist about a meaningful launch in 2024.

Baird analyst has lowered the price target to $316 from $333, with an Outperform rating.

The analyst notes that Biogen’s Spinraza stands out as an effective drug, but Biogen faces stiff competition from Novartis AG’s NVS Zolgensma and Roche Holding AG’s GENENTECH Evrysdi in treating Spinal Muscular Atrophy. 

Although diseases with limited treatment options have historically presented lucrative opportunities for individual products, the simultaneous introduction of three powerful therapies will likely intensify the competitive landscape. Despite concerns, the outlook for Spinraza appears positive, and it is expected to contribute significantly to revenue in the coming decade.

While concerns over maturing franchises affect large caps, Biogen could address revenue shortfalls through acquisitions. A $1 billion-$2 billion product could significantly impact investors, and the company has options in the CNS space that meet this criteria. 

Price Action: BIIB shares are down 2.07% at $221.95 on the last check Wednesday.