April 24, 2018 / 11:24 AM / a year ago

Biogen's revenue misses as Spinraza sales disappoint

(Reuters) - Drugmaker Biogen Inc’s (BIIB.O) quarterly revenue missed analysts’ estimates on Tuesday as it had disappointing sales of its promising drug Spinraza to treat spinal muscular atrophy because fewer new patients used the expensive treatment.

Biogen shares fell in early trade after sales of Spinraza as well as its flagship drug, Tecfidera, were weaker than expected, underscoring investor concerns about the company’s drug development prospects. But shares pared losses and were up 0.6 percent at $260.94 in midday trade.

The company has been banking on Spinraza’s success to prop up slowing growth of its multiple sclerosis drug Tecfidera, which is facing increasing competition.

Spinraza, the first Food and Drug Administration-approved treatment for spinal muscular atrophy, had quarterly revenue of $364 million, short of analysts’ estimates of $381.55 million, according to Thomson Reuters I/B/E/S.

The miss was partly due to lower uptake in the United States and more patients moving to a lower-priced maintenance dose from an induction dose, Jefferies analyst Michael Yee told Reuters.

In the U.S. about 40 percent of Spinraza revenue in the first quarter was from maintenance doses compared with 25 percent in the fourth quarter, Biogen said, noting early adoption was largely from a big influx of new patients.

The number of patients receiving Spinraza grew 16 percent in the U.S. from the preceding quarter and Biogen said it would focus on reaching more adults, the largest group of patients afflicted with the disease in the United States.

“We believe that the international opportunity for Spinraza is even greater than in the U.S.,” Chief Financial Officer Jeffrey Capello said on a conference call.

The company has so far steered clear of big deals and instead focused on smaller investments as it remains under pressure to snap up late-stage drugs, particularly given skepticism about its experimental Alzheimer’s treatments.

“Most investors want them to do a deal that’s of substance so people can see growth on the horizon,” Mizuho Securities analyst Salim Syed said.

“People are just wondering what’s the reason to stay invested in the stock... This is one where if you’re a little bit patient you can make money longer term.”

Sales of Tecfidera hit $987 million in the quarter, below estimates of $1.02 billion.

Net income rose 58 percent to $1.17 billion in the first quarter ended March 31. Excluding items, Biogen earned $6.05 per share, above analysts’ estimates of $5.94.

Revenue rose 11.4 percent to $3.13 billion, shy of the $3.16 billion estimate.

Reporting by Mrinalini Krothapalli and Tamara Mathias; Editing by Amrutha Gayathri, Bernard Orr

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