Biogen (BIIB) Produces Stronger Than Expected Earnings

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Biogen Inc (NASDAQ: BIIB)

Biogen is one of the larger biotech companies on the market today. However, as of late, the company has struggled to keep its stock above water as Tecfidera sales have declined after the emergance of a progressive multifocal leukoencephalopathy or PML-related death while taking the MS drug. Another case of PML was also confirmed in 2015. Nonetheles, BIIB has a strong history with regard to reporting solid earnings, and that didn’t change this quarter. The company beat expectations with regard to both revenue and earnings. Today, we’ll take a look at earnings, how the market reacted to the news and what we can expect to see from BIIB moving forward.

BIIB Earnings Holds Up The Stock’s Strong History

As mentioned above, Biogen reported strong earnings for Q3 2015. They also made an announcement of job cuts and increased their guidance. Here’s what we saw…

  • BIIB Smashes Earnings – First and foremost, Biogen didn’t just report positive earnings, they completely smashed earnings expectations. While analysts were expecting to see earnings per share come in at $3.83, the company actually reported earnings at $4.48.
  • Revenue Comes In Ahead – Biogen also reported strong revenue for the quarter. That figure came in at $2.778 billion. In the case of revenue, analysts were expecting to see the company report a total of $2.663 billion.
  • Restructuring Announcement – During the release of earnings, BIIB also announced that it has plans to restructure. The corporate restructuring will include the termination of some programs in the company’s pipeline as well as job cuts that will lead to an 11% reduction of the work force at BIIB.
  • Guidance – Finally, Biogen announced that it is lifting its guidance with regard to revenue and earnings per share. BIIB now expects for revenue to grow at a rate of 8% to 9% in FY 2015. The previous revenue guidance came in at growth of between 6% and 8%. BIIB also lifted EPS guidance. Previously, the company was expecting to see full year EPS come in at between $15.50 and $15.95 per share. That guidance has increased to between $16.20 and $16.50 per share.

How BIIB Reacted In The Market

In early morning trading, the reaction to earnings was overwhelmingly positive, as we’ve come to expect from positive releases. However, after reaching a high of $288.93 per share, the stock has fallen quite a bit. Currently (10:26), the stock is trading at $270.04 per share after a gain of 1.59%.

What We Can Expect To Se Moving Forward

Currently, there’s quite a bit up in the air when you think about BIIB. The most important of the company’s issue is the decline we’ve seen in Tecfidera sales. Overall, I maintain a positive opinion about the stock, but remain wary of the decline we’ve seen in the sales of the company’s flagship treatment.

What Do You Think?

Where do you think BIIB is headed and why? Let us know in the comments below!

[Image Courtesy of The Awakened Wire]

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