Will New Drugs Help Biogen Surpass Q3 Earnings Estimates?

We expect Biogen BIIB to beat expectations when it reports third-quarter 2024 results on Oct. 30, before market open. In the last reported quarter, the company beat earnings expectations by 32.0%.The Zacks Consensus Estimate for sales and earnings is pegged at $2.44 billion and $3.80 per share, respectively.Factors to Consider for BiogenIn the third quarter, lower sales of multiple sclerosis (“MS”) drugs and spinal muscular atrophy drug, Spinraza, are likely to have been partially offset by revenues from new drugs.Sales of Biogen’s MS drugs like Tecfidera and Tysabri are likely to have declined amid rising competitive pressure in the MS market. Tecfidera sales are declining as multiple generic versions of the drug have been launched in the United States, Brazil and certain EU countries.Drug Sales Estimates: Tecfidera, Tysabri, VumerityThe Zacks Consensus Estimate and our model estimate for third-quarter sales of Tecfidera are pegged at $231.0 million and $222.6 million, respectively.The Zacks Consensus Estimate as well as our estimate for Tysabri is $411.0 million.Sales of another MS drug, Vumerity, are likely to have risen, driven by global patient growth.The Zacks Consensus Estimate and our estimate for Vumerity are pegged at $172.0 million and $176.7 million, respectively.Drug Sales Estimates: Spinraza, Skyclarys, ZurzuvaeSales growth of Biogen’s spinal muscular atrophy drug, Spinraza, in the United States is likely to have been hurt by decreased demand amid competitive pressure. In ex-U.S. markets, Spinraza sales declined in the second quarter due to unfavorable shipment timing in certain emerging markets and currency headwinds. It remains to be seen if ex-U.S. trends improved in the third quarter.The Zacks Consensus Estimate and our estimate for Spinraza are pegged at $435.0 and $459.8 million, respectively.The launch of Biogen’s new drug Skyclarys for Friedreich’s ataxia has exceeded the company’s expectations in both the United States and the EU.Another new drug, Zurzuvae’s launch also exceeded the company’s internal expectations backed by strong patient demand.Zurzuvae (zuranolone) was launched for postpartum depression in December 2023. Biogen has a collaboration with Sage Therapeutics SAGE for Zurzuvae. Sage and Biogen equally share profits and losses for the commercialization of Zurzuvae in the United States, while in outside U.S. markets Biogen records product sales (excluding Japan, Taiwan and South Korea) and pays royalties to Sage.Sales of both Skyclarys and Zurzuvae are likely to have continued to improve sequentially in the third quarter.The Zacks Consensus Estimate and our estimate for Skyclarys are pegged at $112.0 and $108.0 million, respectively.Contract Manufacturing and Royalty RevenuesContract manufacturing and royalty revenues are expected to have declined in the quarter. Contract manufacturing and royalty revenues include Biogen’s 50% share of revenues (including royalties) from the collaboration with Eisai for a new Alzheimer’s drug, Leqembi and revenues from the manufacturing of Leqembi. Leqembi/lecanemab gained full approval from the FDA for early Alzheimer’s disease in the United States and broad reimbursement from Centers for Medicare & Medicaid Services (“CMS”) in July 2023.Though the Leqembi launch was slow, sales picked up in the first half of 2024, with the positive trend expected to continue in the third and fourth quarters. Leqembi sales are recorded by Eisai. Biogen/Eisai are increasing promotional efforts for Leqembi as access and infrastructure are progressing and patient volume is accelerating. Regulatory applications seeking approval of Leqembi are under review in Europe. Leqembi has been launched in China and Japan, which should contribute to growth.Another new drug, Qalsody, which was launched in the United States for amyotrophic lateral sclerosis (ALS) last year, and in the EU in May 2024, should also contribute to sales growth.Biosimilar revenues are expected to have been hurt by supply constraints for Imraldi and Benepali.Operating costs are expected to be higher in the second half than in the first half as the company plans to increase its Leqembi field force by 30% and invest in some targeted direct-to-consumer campaigns and expects to incur $50 million in costs related to the HI-Bio acquisition.BIIB’s Earnings Surprise HistoryThe company’s earnings beat estimates in three of the last four quarters while missing in one. The company has a four-quarter earnings surprise of 10.25%, on average.Biogen Inc. Stock Price and EPS Surprise Biogen Inc. price-eps-surprise | Biogen Inc. QuoteBiogen’s stock has declined 29.3% so far this year compared with a decrease of 2.5% for the industry.Image Source: Zacks Investment ResearchFind the latest EPS estimates and surprises on Zacks Earnings Calendar.What Our Model Says For BIIBOur proven model predicts an earnings beat for Biogen in the to-be-reported quarter. A stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for a likely positive surprise. This is the case here, as elaborated below.Earnings ESP: Biogen’s Earnings ESP is +1.14% as the Most Accurate Estimate of $3.83 is pegged higher than the Zacks Consensus Estimate of $3.78. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.Zacks Rank: Biogen has a Zacks Rank #3 currently.Other Stocks to ConsiderHere are some drug/biotech stocks that also have the right combination of elements to beat on earnings this time around:Pfizer PFE has an Earnings ESP of +2.68% and a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.Pfizer’s stock is up 0.3% year to date. Pfizer exceeded earnings expectations in each of the trailing four quarters. It delivered a four-quarter earnings surprise of 69.82%, on average. Pfizer is scheduled to release its third-quarter results on Oct. 29.Regeneron REGN has an Earnings ESP of +2.65% and a Zacks Rank #3.Regeneron’s stock has risen 7.2% year to date. REGN beat earnings estimates in three of the last four quarters while missing on the remaining occasion. On average, Regeneron witnessed an earnings surprise of 6.01% in the last four quarters. REGN will report third-quarter 2024 results on Oct. 315 Stocks Set to DoubleEach was handpicked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2024. While not all picks can be winners, previous recommendations have soared +143.0%, +175.9%, +498.3% and +673.0%.Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.Today, See These 5 Potential Home Runs >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Regeneron Pharmaceuticals, Inc. (REGN): Free Stock Analysis Report Biogen Inc. (BIIB): Free Stock Analysis Report Pfizer Inc. (PFE): Free Stock Analysis Report Sage Therapeutics, Inc. (SAGE): Free Stock Analysis ReportTo read this article on Zacks.com click here.Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks