Dive Brief:
- Biogen has increased its 2016 financial guidance from $11.2 billion to $11.4 billion in annual sales, the company said Thursday, while also reporting a 12% increase in second quarter sales, compared to a year prior.
- The company also announced a $5 billion share repurchase program as Biogen works to spin off of its hemophilia franchise.The shares will be repurchased "when appropriate" to ensure "fit and purpose" over the next three years, said CEO George Scangos during the call.
- CEO George Scangos also revealed he would step down from the company's top position once a successor is found. Under Scangos, Biogen has become a market leader in multiple sclerosis but is faces a transition as spins off its hemophilia portfolio.
Dive Insight:
The company's Q2 results showed a 12% year-over-year increase (compared to a year prior) as the company recorded $2.9 billion in total revenues, driven by an across-the-board increase in product sales.
And the results were much needed. Last year, Biogen faced an $18 billion market value loss after it announced its MS drug Tecfidera and other products missed a first-half sales target, leading the company to lower its full-year guidance for 2015. The company struggled to recover and has seen its stock fall by roughly a third since then.
But things are changing rapidly for the company, and this morning's triple announcement only underscored that fact. In May, Biogen announced it would spin off its hemophilia business to increase the company's focus on its neurology therapy areas. Scangos' announcement, coupled with the $5 billion share repurchasing suggest the company is doubling down on its restructuring.
But Scangos suggested the company's improving financials provided Biogen with a firm foundation for change.
"During the second quarter we saw solid performance across our commercial business, as a growing number of patients benefited from our broad MS portfolio, hemophilia therapies, and recently launched biosimilar," said Scangos. "As a result, we have raised our financial guidance for the full year. Our board has also authorized a $5 billion share repurchase program. We believe this allows us to return capital to shareholders, while leaving ample room for strategic flexibility."
The company's total revenues have increased by just over $300 million in the past year, with more than half of the increase ($167 million) happening over the last quarter. Product sales have increased across the board. Over the past year Biogen's top-selling drug Tecfidera,for example, grew by 34% to reach $987 million in product sales.
Generally, Biogen is highly dependent on its multiple sclerosis drug portfolio, as it represents 77% of the company's total revenue stream. Hemophilia, on the other hand, only represents 7% of revenues, or roughly $205 million in sales this quarter.
“The Company has an exciting future and I am proud to have had a role in helping Biogen improve the lives of so many patients today and so many more in the future,” added Scangos. “This is the right time for a new leader to take the reins and lead Biogen through its next stage of development."