Biogen Announces 1Q20 Beat, But Aducanumab Update Steals The Show

Biogen (BIIB) has kicked off first quarter biotech earnings with a top- and bottom-line beat. However, the company surprised investors by announcing a significant delay to the aducanumab BLA (biologics license application) filing, which is now set for 3Q instead of early 2020. Aducanumab is a human monoclonal antibody designed to treat early Alzheimer’s disease.

“Among the new disclosures are a pre-BLA meeting this summer and additional “formal interactions” with the FDA (such as Type C meetings); these were not previously communicated and may raise questions on how receptive FDA is to this BLA” comments JP Morgan analyst Cory Kasimov.

As a result shares are currently down 6% in Wednesday’s pre-market trading at $309.

Meanwhile, Mizuho Securities analyst Salim Syed notes that “the original guidance was “early 2020”, then revised to “as soon as possible”, now “3Q20” … and there’s actually very little in the press release that explains why timelines have shifted so much.”

He also reiterated his BIIB hold rating with a $316 price target (4% downside potential), adding that aducanumab is very unlikely at this point to get an FDA decision in 2020 with a 3Q20 submission planned.

Syed concludes “It’s even unclear at this point if an advisory committee would occur in 2020 … our guess this too is now a 2021 event most likely.”

Turning to the numbers, BIIB reported a revenue beat of $120 million due to ex-US Tysabri and ex-US Tecfidera. Meanwhile Q1 Non-GAAP EPS of $9.14 beat the consensus estimate by $1.45; and GAAP EPS of $8.08 beat by $0.50. The press release also states that BIIB revenue benefited from “$100 million attributed to accelerated sales due to the COVID-19 pandemic, primarily in Europe.”

At the same time, there was no mention of financial guidance for 2020, which led analysts to assume that the current guidance is still relevant- especially due to the positive earnings figures. BIIB ended 1Q with $4.83B in cash and $5.96B in debt.

Overall, analysts have a Moderate Buy rating on Biogen with a $346 average analyst price target (5% upside potential). In the last three months, the stock has received 12 buy ratings vs 12 hold ratings, with 2 analysts calling sell. (See BIIB stock analysis on TipRanks).

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