Biogen raises forecast as Alzheimer's drug Leqembi shows signs of growth

(Bloomberg) — Biogen Inc. raised its full-year profit forecast after the company reported better-than-expected third-quarter sales and profits, driven by continued cost-cutting measures and strong performance of its new Alzheimer's drug.

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The biotech company now expects adjusted earnings per share of between $16.10 and $16.60 for 2024 – a rise of 35 cents from the midpoint of its previous guidance.

Adjusted third-quarter profit was $4.08 per share, the Cambridge, Massachusetts-based company said in a statement Wednesday. While that's down 6% from last year, it beats analyst estimates.

The results could help Biogen restore investor confidence. The stock was down 29% this year as of Tuesday's close, largely due to a slow start for Leqembi – which has been on the market since January 2023 for the treatment of Alzheimer's disease – and recent rejection by European regulators over safety concerns.

Shares of Biogen rose 2.2% in early trading as of 7:02 a.m. New York time.

Since taking office in late 2022, Chief Executive Officer Chris Viehbacher has worked to increase Leqembi's sales, reduce costs and diversify Biogen's portfolio to reduce its reliance on high-risk neuroscience ventures. In May, Biogen agreed to buy Human Immunology Biosciences Inc. for up to $1.8 billion to expand its pipeline of treatments for immune diseases. Viehbacher also led Biogen's largest acquisition ever last year, buying Reata Pharmaceuticals Inc. for $7.3 billion to acquire its approved therapy for Friedreich's ataxia, a rare neurodegenerative disease.

Last year, Biogen announced plans to cut 1,000 jobs – over 11% of its workforce – and cut operating costs by another $700 million by 2025. On Wednesday, the company forecast that these cost-cutting efforts will help boost U.S. operating income growth in the high teens percent range for the year.

Quarterly sales of Leqembi, which Biogen developed in collaboration with Japan's Eisai Co., rose to $67 million from about $40 million in the previous quarter, beating analysts' expectations of $51 million.

Biogen is betting that Leqembi will help offset the decline in its multiple sclerosis drugs. Leqembi is the first drug proven to slow the progression of Alzheimer's disease, the mind-numbing disease that affects about 6 million Americans. However, sales in the US were held back by logistical hurdles.

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Regulators in Europe and Australia rejected the drug, saying its risks could outweigh its benefits, a setback as Biogen and Eisai face new competition. In July, U.S. regulators approved a competing Alzheimer's therapy from Eli Lilly & Co.

Biogen's total revenue reached $2.47 billion in the third quarter, slightly above analysts' average estimate of $2.43 billion. The company reiterated its expectation of a “low single-digit percentage” decline in sales for the year, driven primarily by declining sales of its multiple sclerosis drugs.

Sales of Skyclarys, for the treatment of Friedreich's ataxia, were $102 million, up slightly from $100 million in the second quarter. Analysts expected revenue of $107 million.

(Updates with proportions in fifth paragraph.)

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