Dive Brief:

• Biogen Inc. brought in $3.1 billion during the third quarter, a 4% year-over-year increase that was largely due to the continued commercialization of Spinraza.
• The treatment for spinal muscular atrophy fetched $271 million from July through September. While that revenue is a considerable leap from the $208 million earned in the second quarter, Spinraza's performance in the U.S. was relatively flat — a development that appeared to cause concern among some investors. 
• CEO Michel Vounatsos explained that many of the patients who took full dose loading regimens earlier in the year didn't receive maintenance dosing (which occurs every four months) in the third quarter. Biogen leadership did note, however, that over time maintenance therapy would equalize and become the predominant source of Spinraza revenues.

Dive Insight:

Biogen has very few drugs in late-stage testing, putting pressure on the company's core multiple sclerosis business and the recently rolled out Spinraza (nusinersen) franchise to perform well until new products come into its portfolio.

Spinraza, at least in Biogen's view, has done just that. Between the second and third quarter, the number of U.S. patients taking the drug rose 75% while total revenue grew 30%. The company expects growth to continue as well, particularly ex.-U.S. as its drug gets approved and marketed in new countries.

Yet, investors weren't sold on that rosy outlook. On a Tuesday earnings call, analysts pressed Biogen for more details about how — given the dramatic increase in U.S. patients taking Spinraza — stateside inventory levels remained the same and revenues only had an uptick of $3 million. 

Vounatsos said during the call that as patients progress along the treatment timeline, maintenance dosing will yield more returns.

"Over time this will normalize, and that’s why we’re prudent — the way we’ve been prudent since the beginning of the year," Vounatsos added. Biogen declined to give guidance on how well the Spinraza franchise might perform in the first quarter of 2018.

Though Biogen stock has done well across the majority of 2017, third quarter results seem to have jostled investors. Shares were down nearly 3% to $319 apiece at Tuesday's market open, and continued to fall in morning trading.

That sell off isn't exactly warranted, though, according to analysts. Mizuho has a Buy rating for Biogen, whereas investment bank Jefferies issued a Hold rating.

"We remind investors there was: 1) $30M of inventory in Q2 so there was actually $30M of [sequential] growth or 17% [quarter over quarter] growth, and 2) that SMA [patients] are moving to "maintenance dosing" which has 75% less dosing per quarter — this will impact Q4 coming up as well which could be flattish to down in USA but this shouldn't be surprising as it will normalize out in 2018," Jefferies analyst Michael Yee wrote in an Oct. 24 note.

"This is like Lucentis and Eylea dosing seen previously by Genentech and Regeneron when dosing the AMD drugs (big bolus of induction, followed by maintenance)," he added.

As for the big biotech's multiple sclerosis drugs, they delivered a fairly regular third quarter. Revenues across the segment totaled $2.3 billion, up ever-so-slightly from the same period in 2016. Tecfidera (dimethyl fumarate) once again made up the lion's share, bringing in $1.07 billion.