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Must-Read Notes on Biogen’s 3Q15 Earnings and Conference Call

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Oct. 26 2015, Updated 4:59 p.m. ET

3Q15 earnings

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.

For 3Q15, Wall Street estimated net profit margins of peers AMGen (AMGN), Celgene Corporation (CELG), and Gilead Sciences (GILD) to be about 34%, 42.4%, and 54.8%, respectively.

After its 3Q15 earnings release, Biogen’s share price rose by 4.9% above that of October 20, 2015. To read a complete overview of Biogen (BIIB), please read A Must-Read Company Overview of Biogen.

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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.

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