Analyzing Biogen before Its Third-Quarter Earnings

Biogen

Biogen (BIIB), a leading biotechnology company, is scheduled to release its third-quarter earnings on October 23. Analysts expect the adjusted EPS to be $6.78 on revenues of $3.33 billion during the third quarter.

Analyzing Biogen before Its Third-Quarter Earnings

The above chart compares the EPS and revenues since the first quarter of 2017 with the third-quarter estimates.

Revenue estimates

During the third quarter of 2018, Biogen is expected to report an 8.2% growth in revenues to $3.331 billion—compared to $3.077 billion during the third quarter of 2017. Analysts expect growth in product revenues and revenues from the anti-CD20 therapeutic programs during the third quarter.

The revenues are expected to be driven by the strong performance of multiple sclerosis products including Tecfidera and Tysabri; Spinraza—the spinal muscular atrophy product; and other products including Benepali and Flixabi.

Profitability estimates

Analysts expect the gross profit margin to decrease to 87.0% during the third quarter—compared to the gross profit margin of 89.9% during the third quarter of 2017. The EBITDA margin is expected to decrease to 57.0% during the third quarter—compared to 60.5% during the third quarter of 2017. The EBITDA margin is expected to decrease due to higher research and development expenses during the quarter, partially offset by lower selling, general, and administrative expenses. The net adjusted income is expected to increase to ~$1.40 billion during the third quarter—compared to $1.34 billion during the third quarter of 2017.

Notably, the iShares NASDAQ Biotechnology ETF (IBB) holds 8.1% of its total investments in Biogen, 8.6% in Amgen (AMGN), 8.6% in Gilead Sciences (GILD), and 7.3% in Celgene (CELG).