From Merrill, yesterday:
Biogen delivered strong revenues across all products for Q3
Biogen reported Q3 earnings of $0.98, exceeding our estimates and consensus
expectations of $0.89. All products exceeded expectations, with Avonex
benefiting from a 9% price increase last quarter, as well as from Tysabri
discontinuations. Tysabri sales exceeded expectations by 5%, but management
indicated that the drug is likely to be pressured as discontinuations increase and
new patient additions slow following the 2 cases of PML in the E.U. Management
reaffirmed FY guidance of >$3.50, as well as the 2010 goal of 100K Tysabri
patients, which will require re-acceleration of Tysabri growth following the current
slowdown. We expect BIIB shares to Underperform in our cluster given the
multiple concerns about Tysabri--the primary growth driver for the company.
Good Tysabri revs for the Q, but sustainability in question
Biogen indicated that 35,500 patients are on Tysabri worldwide, with ~18,000
patients receiving 1-year of treatment and ~9,500 patients 18 months of treatment
with no new cases of PML since July. The company indicates that they are
expecting a moderation of growth as the drop-out rate increases and new patient
starts decreases, but that the 100K goal by 2010 is achievable with a
reacceleration of growth. Future growth may be impacted if physicians begin
implementing a limitation on total Tysabri exposure or frequent drug holidays.
Changes to our model
Following the earnings call we have adjusted our model accordingly. We estimate
~50K Crohn’s/MS patients on Tysabri by 2010, below company guidance. For FY
2008 our EPS is $3.57 from $3.50, for FY 2009 $4.06 from $3.98 and for FY 2010
$4.20 from $4.10. |
