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Biogen’s Interferon Therapies Could Witness Modest Fall in 2017

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Interferons revenue trends

In 2016, Biogen’s (BIIB) interferon therapies, Avonex and Plegridy, together reported revenues of around $2.8 billion, which reflected a drop of ~6% on a year-over-year (or YoY) basis.

In 1Q17, Biogen’s interferons generated revenues of around $648 million, which is a ~3% decline on a YoY basis and a ~6% decline on a quarter-over-quarter basis. In 1Q17, Avonex reported sales of around $536 million, while Plegridy reported revenues of ~$112 million. In 1Q17, Avonex witnessed a 5% decline in revenue on a quarter-over-quarter basis, while Plegridy witnessed a 10% decline in revenues on a quarter-over-quarter basis. The increasing competition in the multiple sclerosis segment is the primary reason for the drop in sales revenues of Biogen’s interferon therapies. Biogen has claimed that unfavorable foreign currency fluctuations negatively impacted its 1Q17 sales by around $7 million. The company’s interferon product sales could affect the stock prices of the Vanguard Growth ETF (VUG). Biogen holds around 0.58% of VUG’s total portfolio holdings.

The above graph represents the revenue trajectory of interferons from 1Q16 to 1Q17. To know more about Biogen’s interferon therapy and historical revenue statistics, read Injectable Therapies Still a Major Part of Biogen’s MS Franchise.

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Market competition

Biogen’s interferons, Avonex and Plegridy, face stiff competition from Bayer’s (BAYZF) Betaseron/Betaferon (interferon-beta-1b), Novartis’s (NVS) Extavia (interferon-beta-1b), and Merck’s (MRK) Rebif (interferon-beta-1), which are utilized for the treatment of multiple sclerosis.

In 2016, Novartis’s Gilenya reported revenues around $3.1 billion, reflecting a 14% growth on a YoY basis, which depicts the increasing competition in the multiple sclerosis (or MS) marketplace.

Interferon beta-1a primarily helps in the reduction of neuron inflammation by balancing the expression of pro- and anti-inflammatory agents in the brain. In in-vitro, interferon beta decreases the production of T-helper 17 (or Th17) cells, which are a subset of pro-inflammatory T helper cells. The reduction of Th17 cells is believed to play a role in the pathophysiology of MS and decrease the physical disability associated with MS.

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