- Biogen Inc. reported first quarter earnings Tuesday, disappointing investors with lower sales of its spinal muscular atrophy drug and giving them nothing new in the way of M&A.
- Sales of Spinraza totaled $364 million during the three-month period, missing analyst forecasts of $381 million and remaining in line with fourth quarter sales in 2017.
- There are now 1,910 patients on Spinraza in the U.S., up from 1,640 in the fourth quarter. But Biogen saw only 280 new patient starts from January to March, down from 420 in the previous three month period. Forty percent of patients are now on maintenance doses.
The success of rare disease drug Spinraza (nusinersen) has surprised some — it was considered a risky pipeline asset and market uptake wasn't certain following approval. But Biogen succeeded, and has since launched the drug to impressive growth.
Biogen has warned from the beginning, however, that fast growth wouldn't last. Eventually, the number of new infant patients would level off.
That time has come, and investors are not thrilled. The big biotech's stock sank nearly 3% in early morning trading before gaining back its losses.
Biogen management, though, remained upbeat about the trajectory of Spinraza on an April 24 earnings call. The company considers the drug one of its main growth drivers — its core multiple sclerosis franchise continues to decline due to increased competition from newer drugs, and success for its late-stage pipeline still appears risky.
"I don't think we're saying that Spinraza is going to flatten out indefinitely," said Chief Financial Officer Jeff Capello. "I think what we're saying is that we had such success getting through the bolus of patients when we first introduced the drug that we had a one-time benefit of a number of patients, particularly in the infants and pediatrics. And we've worked our way through that, which is why the loading doses have come down a bit and it's impacting our sequential growth."
Biogen CEO Michel Vounatsos told investors the company has worked through the infant patient population, and is now focusing on adults with the disease.
"We did extremely well and we outpaced expectations that we had and that external stakeholders had. So we did extremely well and the model worked. Now, the second phase is to do the same, but for the pediatric and adult population," Vounatsos said, adding that the company has increased its number of sales reps in the field and created a sales campaign geared toward this population.
"There are still more than 5,000 patients to go," he said.
Investors are skeptical, however. Gene therapies that could modify, or even cure, SMA could soon become a reality. Many analysts and investors feel Biogen missed an opportunity when it allowed competitor AveXis Inc. to be picked up by Novartis AG in a recent $8.7 billion deal.
But Biogen insists these gene therapies are not a threat to Spinraza. "We do not believe gene therapies will replace [antisense oligonucleotides like Spinraza], but will provide a complementary therapy option," said Michael Ehlers, head of R&D, on the call.
On M&A, Biogen says it's looking for late-stage assets that are closer to commercialization, and that it remains "well-capitalized."