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Biogen’s 2Q15 Earnings Beat Wall Street Estimates

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Earnings overview

Biogen (BIIB) posted its 2Q15 earnings on July 24, 2015. The company’s diluted earnings per share (or EPS) of $3.93, adjusted for one-time gains and expenses, becomes $4.22. This exceeded Wall Street estimated EPS of $4.10. In 2Q15, Biogen registered revenues and net income of about $2.6 billion and $927.3 million, respectively.

After the company’s 2Q15 earnings announcement, Biogen’s share price fell by 22.1%. Compared to 2Q14, Biogen’s revenues in 2Q15 rose by 7% while its net income increased by 31.2%. However, the company’s share price suffered from reduced revenue forecasts for the remainder of 2015.

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Comparative analysis

The above graph shows that, after 2013, the iShares Nasdaq Biotechnology ETF (IBB) has registered the best performance, amounting to annualized return of about 48%. Other biotechnology stocks such as Biogen, Amgen (AMGN), Gilead Sciences (GILD), and Celgene (CELG) registered annualized returns of 31.9%, 25.9%, 17.7%, and 22.6%, respectively.

Since 2013, Biogen’s share price has remained high, buoyed by strong performance and high investor expectations. Biogen has introduced four new drugs: Tecfidera and Plegridy in the multiple sclerosis (or MS) market and Alprolix and Eloctate in the hemophilia market. Tecfidera proved to be a huge commercial success, as the oral MS drug won market share from its competitor drugs, Aubagio and Gilenya. By the first quarter of 2014, the drug earned about $1.38 billion, entering the league of blockbuster drugs—drugs crossing $1 billion revenue mark.

The better-than-expected positive clinical trial results for Biogen’s experimental Alzheimer’s drug, BIIB037 or aducanumab, in March 2015 further increased investor confidence in Biogen, leading to high share prices. Investor sentiment, however, has been dampened by the latest data related to BIIB037 released on July 22, 2015. To learn more about Biogen, please refer to A Must-Read Company Overview of Biogen.

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