In 3Q15, oncology drugs Rituxan and Gazyva earned a total revenue in the United States of $959.1 million, of which Biogen’s (BIIB) profit share was $320 million. Biogen earns revenues from its collaboration with Genentech, a wholly-owned subsidiary of Roche Holding (RHHBY), for the sale of Rituxan therapy to treat non-Hodgkin’s lymphoma and CLL (chronic lymphocytic leukemia). The company also earns revenues from its collaboration with Roche for Gazyva, a drug approved for CLL.
Biogen’s US profit share from sales of Rituxan and Gazyva includes expense reimbursements for selling and marketing the drugs.
Rituxan and Gazyva performance
Rituxan was the first monoclonal antibody treatment to be approved for cancer in the United States. The drug has proven to be a blockbuster therapy due to high efficacy as well its expanded use for multiple types of cancer. Approved on November 1, 2013, Gazyva was the first drug designated as a breakthrough therapy to be approved by the FDA (Food and Drug Administration), and has proven to be a commercial success. For CLL drugs, Rituxan and Gazyva compete with Amgen’s (AMGN) Blincyto, Bristol Myers Squibb’s (BMY) Sprycel, and Gilead Sciences’ (GILD) Zydelig. To know more about monoclonal antibodies, please refer Key Therapies for Cancer Will Determine Biotechnology’s Profits.
In 3Q15, compared with 3Q14, Rituxan and Gazyva’s US net revenues rose by 4.6%, while Biogen’s profit share rose by about 18.1%. The increase in the drugs’ net sales is mainly attributed to a drug price increase in the United States. Biogen’s profit share in 3Q14 was reduced by about $21 million due to branded prescription drug fees for 2013.
Instead of directly investing in Biogen and being exposed to any company-specific risks, you can invest in the company through the iShares Russell 1000 Growth ETF (IWF). Biogen accounts for 0.6% of IWF’s total holdings.