- Biogen Inc. announced fourth quarter and full year earnings Thursday morning, reporting 2017 revenues of $12.3 billion, up 15% excluding the hemophilia business it spun out. Earnings per share decreased 30% to $11.92 due to a $1.2 billion charge related to the U.S. tax cuts passed at the end of last year.
- The big biotech's multiple sclerosis franchise grew 4% to $9.1 billion and included $159 million in royalties from Roche AG related to the MS drug Ocrevus.
- Along with its earnings report, Biogen announced it would acquire a compound from Karyopharm Therapeutics Inc. for $10 million upfront, plus $207 million in potential milestones.
The one thing investors want to know from Biogen is how the biotech plans to spend its money, Jefferies analyst Michael Yee noted.
The slashing of the corporate tax rate and other tax changes has analysts and investors counting on big biotech and pharma companies to spend their newly repatriated cash on deals.
But that might be a bit of wishful thinking; Most of the major biopharmas have already said that they plan to do quite a bit of share repurchases — and Biogen is no different.
"I don't see a frenzy or increase [in M&A] because of an increase in cash," said Biogen CEO Michel Vounatsos on a Jan. 25 call with investors.
The Karyopharm deal — which will only cost Biogen $10 million in the near-term — has left investors feeling a little cheated on the deal front.
Biogen's $KPTI license deal this morning is a rounding error for $BIIB. Its $10M, not $210M. Literally a small fraction of the interest they will make on their $3.5B in cash sitting in a savings account this year.— Bruce Booth (@LifeSciVC) January 25, 2018
Biogen is at the top of most lists for dealmaking this year. But Vounatsos wasn't so forthcoming with details on that during the call with analysts.
He said Biogen is interested in acquiring individual early stage assets (like the one it just grabbed from Karyopharm that will enter the clinic later this year for amyotrophic lateral sclerosis). He also noted that the company is "contemplating" larger opportunities.
New CFO Jeff Capello said large companies with mid-to-late stage assets are attractive to the company at the moment, emphasizing the "near-term revenue opportunities."
If Biogen does do any meaningful deals this year, expect them in the neuroscience space. Vounatsos said finding assets that have "alignment to the current strategy" is an important factor. The company has been defending its leadership position in multiple sclerosis — it picked up a potential competitor to blockbuster Tecfidera (dimethyl fumarate) in 2017 from Alkermes plc that Biogen said it will file for approval for this year.
Roche's new multiple sclerosis drug Ocrevus (ocrelizumab) is the only approved therapy for the progressive form of the disease. While it is cutting into sales of Tysabri (nataluzumab), Biogen collects royalties on the sales of the new treatment that allow it to offset the loss a bit. Fourth quarter Tysabri sales were down about 2%, or about $11 million, year-over-year to $463 million. Ocrevus contributed about $77 million during the quarter in royalties.