Biogen has been trying to avoid catastrophe. Its latest earnings report, however, depicts a company that is losing ground in crucial battles and, as a result, is heavily reliant on an experimental drug with uncertain approval prospects.
For the past year, Biogen's health has hinged on three events. The first: protecting patents for its top seller, the multiple sclerosis drug Tecfidera, which generates billions of dollars in annual revenue. The second: holding onto market share for its fastest growing product, a rare disease treatment called Spinraza, despite the entry of newer therapies.
On both of these fronts, Biogen isn't faring well. In June, a key legal case regarding the Tecfidera patents didn't go Biogen's way, prompting generic versions of the drug to launch shortly after. Biogen said Wednesday that generic competition has caused a 14% year-over-year decline in the part of its portfolio that includes Tecfidera, and forecasted "significant erosion" to the brand in the fourth quarter.
Biogen's also had trouble getting traction on Vumerity, a so-called follow-on drug that's supposed to be as effective but more tolerable than Tecfidera. Third quarter revenue from Vumerity reached just $15 million.
Meanwhile, Spinraza, which for almost three years was the only treatment available for spinal muscular atrophy, is now up against a gene therapy from Novartis and a recently approved oral drug from Roche. In the U.S. market, Spinraza revenue fell more than 20% between the third and fourth quarters, a drop that Biogen partially attributed to patients switching onto Roche's drug, Evrysdi.
Those challenges have put the spotlight on the third event: securing approval for aducanumab. The drug could become the first ever treatment for what many researchers think is the underlying cause of Alzheimer's disease, but Biogen first must convince a panel of experts, and then regulators, that a mixed set of results are convincing enough to warrant an approval.
While Biogen executives remain confident in aducanumab's odds of success, Wall Street analysts aren't so sure. Some have put approval chances in the 30% to 50% range, noting that the Food and Drug Administration will likely take issue with the confounding results seen in late-stage studies of the drug.
Any concerns the FDA has should become clearer on Nov. 6, when agency staff and Biogen will present the merits and issues surrounding aducanumab in front of a committee that advises the agency on whether to approve or reject new brain drugs.
Beyond aducanumab, analysts haven't seen much in Biogen's pipeline of high-risk neuroscience drugs that can generate the kind of growth needed should the pressure on Tecfidera and Spinraza continue. Notably, Biogen said Wednesday that it has stopped working on two medicines: one called opicinumab, which has now failed multiple studies for multiple sclerosis; and a gene therapy for spinal muscular atrophy called BIIB089.
Biogen lowered its revenue expectations for 2020, going from the range of $13.8 billion to $14.2 billion, to the range of $13.2 billion to $13.4 billion.
Given the financial pressure and uncertainty ahead, some analysts on Wednesday's call questioned Biogen's strategic direction.
"You're about to lose $3 billion in Tecfidera sales, and I'm just curious how come you're not announcing some type of restructuring plan or just a significant cost-cutting to help offset that," Marc Goodman, an analyst at SVB Leerink, asked on the call. "I understand that Vumerity is still there, but clearly there's a disconnect ..."
CEO Michel Vounatsos acknowledged the threats to Biogen's core business, but expressed confidence that the company will be able to persevere.
"Vumerity is immaterial for now, but it's demonstrating some good signs," Vounatsos said. "And, obviously, there is aducanumab."