Biogen BIIB-Q on Wednesday cut its annual profit forecast to below Wall Street estimates due to higher costs associated with the launch of Alzheimer’s drug Leqembi and its $6.5-billion Reata Pharmaceuticals acquisition, and shares fell more than 4 per cent.
About 800 people were currently being treated with Leqembi, Biogen’s Alzheimer’s partner, Japanese drugmaker Eisai, said on Tuesday, making Biogen’s target of 10,000 patients on the drug by the end of March 2024 look increasingly difficult.
“I think people were looking for a few more patients on therapy there,” said William Blair analyst Myles Minter, adding that it was a “long way” from hitting that 10,000-patient goal.
Biogen said it now expects full-year adjusted profit of $14.50 to $15.00 per share, the new high end of the range matching the low end of its previous forecast of $15 to $16. Analysts were estimating $15.26 per share.
Biogen shares have declined over 11 per cent so far this year as its older multiple sclerosis drugs, long a growth driver for the company, face intense competition from cheaper versions and other rival treatments.
Biogen urged investors to focus on its newer treatments including postpartum depression drug Zurzuvae, and Friedreich ataxia treatment Skyclarys, acquired with the purchase of rare disease drugmaker Reata.
“This really is the start of a transition from a historical maturing product portfolio of multiple sclerosis to a new portfolio,” CEO Christopher Viehbacher said on a call with reporters.
“We now have the elements to grow sustainably so our focus is no longer on doing anything of significance in M&A at least for the time being,” Viehbacher said.
Since taking the helm a year ago, the former Sanofi CEO has led efforts to cut expenses and help Biogen recover from missteps around the Alzheimer’s drug Aduhelm, which never gained traction after a controversial approval.
“Whether the ‘new Biogen’ has arrived remains to be seen,” said BMO Capital Markets analyst Evan Seigerman.
Eisai on Tuesday said it was targeting revenue of 10 billion yen ($66.5-million) from Leqembi by March. Leqembi revenue recorded by Eisai was about $2-million for the third quarter.
Biogen said it expects annual sales to decline in low-single digits from last year, up from a previous forecast of a mid-single digit drop.
Total expenses more than doubled to $2.67-billion in the third quarter.
Third-quarter profit of $4.36 per share topped Wall Street estimates by 39 cents, buoyed by sales of Spinraza, its expensive treatment for spinal muscular atrophy, and higher contract manufacturing revenue.