Investors Grin Over Biogen's $3.4 Billion Cash Pile and Earnings Report

Investors Grin Over Biogen's $3.4 Billion Cash Pile and Earnings Report
January 28, 2016
By Mark Terry, Breaking News Staff

Cambridge, Mass.-based Biogen Inc. announced its 2015 financial and fourth-quarter reporting yesterday, citing $10.8 billion in annual revenues, an increase of 11 percent over 2014.

Biogen exceeded analysts expectations, who were predicting a revenue increase of about 9 percent. Net income was $3.6 billion, which is a 23 percent increase on an earnings-per-share basis.

Although investors should be happy with those figures alone, the company has given them even more to smile about, with a significant cash stockpile of $3.4 billion. Analysts tend to take this as an indication Biogen will being making some acquisitions, of either companies or drugs.

The company, which recently made a shift from its multiple sclerosis focus to Alzheimer’s, is set to have an interesting year of product launches. “The year ahead will be very exciting for our pipeline, as we look to advance several potential breakthrough programs,” said George Scangos, Biogen’s chief executive officer, in a statement. “We are executing two Phase III clinical trials for aducanumab in Alzheimer’s disease, and are awaiting new data from two other Alzheimer’s candidates. We are encouraged by open label Phase II data for nusinersen for spinal muscular atrophy, the leading genetic cause of infant mortality, and are advancing two Phase III studies in infants and children with our collaboration partner Ionis.”

In addition, the company plans to have Phase II data for anti-LINGO in multiple sclerosis available mid-year.

Revenue was primarily driven by sales of Tecfidera, which generated $3.6 billion compared to $2.9 billion in 2014. $2.9 billion of those sales were in the U.S., and $730 million outside.

“We saw solid performance in our industry leading multiple sclerosis portfolio and strong adoption of our hemophilia therapies,” Scangos said in a statement. “We continue to make investments in important and promising programs that we believe have the potential to help people suffering from devastating diseases, and we are also excited about the potential to launch three new products this year: Benepali, Zinbryta and an infliximab biosimilar.”

Benepali (etanercept) is a biosimilar for Enbrel for the treatment of moderate to severe rheumatoid arthritis, psoriatic arthritis, non-radiographic axial spondyloarthritis and plaque psoriasis. Enbrel is marketed by Thousand Oaks, Calif.-based Amgen . Zinbryta is a treatment for multiple sclerosis. Infliximab is marketed as Remicade by Janssen, a Johnson & Johnson company, for the treatment of Crohn’s disease, ulcerative colitis, rheumatoid arthritis, psoriatic arthritis, ankylosing spondylitis and plaque psoriasis.

Although the $4.3 billion in cash doesn’t exactly seem to be burning a hole in Biogen’s pocketbook, Scangos did tell the Boston Business Journal that with the biotech sector currently declining, especially for smaller companies, presented “interesting opportunities.”

Biogen took a little jump at the good news, although not a huge bump. Shares are currently trading for $270.78, up from its yearly low of $256.04 on Oct. 13, 2015. It’s still a long ways from its high of $471.95 on Mar. 20, 2015.

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