In its 3Q15 earnings report released on October 21, 2015, Biogen reported a YOY (year-over-year) rise of around 11%, from revenues of $2.1 billion in 3Q14 to $2.4 billion in 3Q15. In 3Q15, the company reported diluted EPS (earnings per share) of $4.48 and managed to beat Wall Street’s estimated EPS of $3.77.
Despite registering revenues lower than analysts’ expectation of about $2.6 billion, Biogen managed to achieve a net profit margin of 34.1% in 3Q15, 9% higher than that recorded in 3Q14. Biogen’s 3Q15 profit margin also exceeds analysts’ projections by 0.4%. The company’s restructuring program has been one of the major factors responsible for reducing Biogen’s operating expenses, which has subsequently led to higher margins.
Full-year 2015 guidance
Biogen raised its revenue growth rate guidance for full-year 2015 from the range of 6%–8% to the range of 8%–9%. The company estimated a sequential fall in revenues for 4Q15 based on projections of stable MS (multiple sclerosis) drug inventory levels and reduced Rituxan inventory levels in the United States. The guidance for SG&A (selling, general, and administrative) expenses has also been lowered from the range of 20%–21% to the range of 19%–20% due to continued cost control measures. R&D (research and development) expenses are projected to be in the range of 19%–20% for full-year 2015. On account of strong revenues in 3Q15, cost cutting measures and share repurchase activity, the company has projected EPS in the range of $14.65 to $14.95 for full-year 2015.
Instead of directly investing in Biogen and being exposed to any company-specific risks, you can invest in the company through the iShares Nasdaq Biotechnology ETF (IBB). Biogen accounts for 7.8% of IBB’s total holdings.