Biogen Reports 2016 Revenues of $11.4 Billion

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The FINANCIAL — Biogen Inc. on January 26 reported full year and fourth quarter 2016 financial results, including:

Full year total revenues of $11.4 billion, a 6% increase versus the prior year. On a constant currency basis1, total revenues grew 9%.

Growth was driven by a 9% increase in worldwide TECFIDERA revenues as well as increased revenues from TYSABRI, ELOCTATE, ALPROLIX, and BENEPALI. Revenues were partially offset by a decrease in worldwide interferon sales, according to Biogen.

Foreign exchange negatively impacted total revenues by approximately $211 million compared with 2015, primarily driven by changes in hedge results.

Full year GAAP net income attributable to Biogen Inc. of $3.7 billion, a 4% increase versus the prior year.

GAAP net income was negatively impacted by $339 million, net of tax, related to the settlement and license agreement with Forward Pharma A/S.

Full year GAAP diluted earnings per share (EPS) of $16.93, a 10% increase versus the prior year.

GAAP EPS were negatively impacted by $1.55, net of tax, related to the settlement and license agreement with Forward Pharma.

Full year non-GAAP net income attributable to Biogen Inc. of $4.4 billion, a 12% increase versus the prior year.

Full year non-GAAP diluted EPS of $20.22, a 19% increase versus the prior year.

“Biogen seeks to advance transformational pipeline programs for some of the greatest challenges in medicine, including Alzheimer’s disease, Parkinson’s, and ALS,” said Chief Executive Officer Michel Vounatsos. “SPINRAZA for spinal muscular atrophy is a prime example of the type of groundbreaking innovation that we must continue to pursue. As the first treatment for infants and children with this devastating disease, SPINRAZA has the potential to improve and extend the lives of thousands of patients worldwide.”

“In 2016 we saw continued growth from our multiple sclerosis portfolio, which includes the market leading therapies amongst the orals, the interferons, and the high efficacy agents,” Vounatsos continued. “Together with AbbVie we are launching ZINBRYTA as a new option for MS patients around the world. Our hemophilia products continued to perform well as we prepare to spin off this business in the coming days, and we are pleased with the strong growth of BENEPALI, an etanercept biosimilar we are commercializing in Europe. I am excited to take the helm of a company with such a strong foundation, and my plan is to maintain a disciplined focus on near-term execution while laying the groundwork for Biogen’s long-term sustainability through continued investment in R&D and innovation and business development.”

R&D expense for the fourth quarter of 2016 includes a $50 million milestone to Eisai following the initiation of Phase 3 trials for elenbecestat (E2609), a BACE inhibitor in development for Alzheimer’s disease.

Biogen booked a GAAP-only pre-tax charge in Q4 2016 of $455 million related to the recent settlement and license agreement with Forward Pharma. The charge in Q4 2016 represents the portion of the payment attributable to the sales of TECFIDERA during the period April 2014 through December 31, 2016. Upon effectiveness of this agreement, Biogen has agreed to pay Forward Pharma a total of $1.25 billion plus potential royalties.

Other Financial Highlights

For 2016, the Company’s full year weighted average diluted shares were 219 million. For the fourth quarter of 2016, the Company’s weighted average diluted shares were 217 million. The Company ended the year with approximately 216 million basic shares outstanding.

As of December 31, 2016, Biogen had cash, cash equivalents and marketable securities totaling approximately $7.7 billion, and $6.5 billion in notes payable and other financing arrangements.

During the fourth quarter of 2016, Biogen repurchased 2.2 million shares of the Company’s common stock for a total value of $651 million.

2017 Financial Guidance

Biogen also announced its full year 2017 financial guidance. This guidance consists of the following components:

Revenue is expected to be approximately $11.1 to $11.4 billion.

GAAP and non-GAAP R&D expense is expected to be approximately 16% to 17% of total revenue.

GAAP and non-GAAP SG&A expense is expected to be approximately 15% to 16% of total revenue.

GAAP diluted EPS is expected to be between $18.00 and $18.80.

Non-GAAP diluted EPS is expected to be between $20.45 and $21.25.

Guidance assumptions:

Includes one month of sales for our hemophilia products, ELOCTATE and ALPROLIX, as the spin-off of Bioverativ is expected to complete on February 1, 2017.

GAAP guidance includes the minimum expense we expect to record in 2017 upon the effectiveness of our settlement and license agreement with Forward Pharma. The actual charges recorded will depend on the outcomes of the patent proceedings in the U.S. and E.U.

R&D expense does not include any impact from potential acquisitions or large late-stage business development transactions, as both are hard to predict.

Based on recent rates for foreign exchange.

Does not include any impact from potential U.S. corporate tax reform or changes to the Affordable Care Act.

Biogen may incur charges, realize gains or experience other events in 2017 that could cause actual results to vary from this guidance.

In 2017, the Company plans to provide one update to its annual financial guidance, which is expected to be provided in connection with its second quarter earnings release. This approach is intended to synchronize guidance with internal business planning processes and to ensure a continued focus on long-term value creation.

 

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