Tecfidera Continues to Be Key Revenue Driver for Biogen in 1Q16

Strong Product Portfolio Drove Biogen’s 1Q16 Profit Margins

(Continued from Prior Part)

Tecfidera performance

By the end of 1Q16, Biogen’s (BIIB) leading multiple sclerosis (or MS) drug, Tecfidera, had treated about 190,000 multiple sclerosis patients.

On April 20, 2016, at the 68th annual meeting of the American Academy of Neurology (or AAN), Biogen presented data emphasizing the real-world efficacy of Tecfidera and highlighted the improved clinical outcomes that can occur for patients who opt for the drug in earlier stages of MS. This data will likely further increase the confidence of patients, physicians, and payers. It will also likely lead to strong revenue growth in future quarters.

Tecfidera managed to earn about $946 million in revenues in 1Q16, which is a year-over-year (or YoY) rise of 14.7%. Tecfidera’s revenues from the US market also rose by about 14.8% YoY and reached $744 million in 1Q16. Compared to 4Q15, Tecfidera’s inventory in the wholesale channel in the US fell by $20 million in 1Q16 . This has resulted in a sequential decline in the drug’s revenues from the US market in 1Q16.

Foreign markets

Tecfidera currently accounts for close to 20% of the total MS market in Germany. Other major foreign markets for Tecfidera include France, the United Kingdom, Italy, and Spain. Tecfidera’s rest of world (or ROW) revenues, however, fell by about $14 million YoY due to adverse foreign exchange movements. Other biotechnology peers such as Amgen (AMGN), Celgene (CELG), and Gilead Sciences (GILD) are also expected to witness the negative impact of weak foreign currencies in 1Q16.

DTC campaign

Biogen managed to create awareness related to Tecfidera through its direct-to-consumer (or DTC) campaign, which mainly involved television advertisements. The company, however, expects to phase out this campaign after 2Q16, and focus mainly on digital and print mediums of marketing. To learn more about Biogen’s DTC campaign for Tecfidera, please refer to Biogen’s Weak 2Q15 Tecfidera Performance Dampens Sentiment.

If Biogen continues with its strong Tecfidera performance in future quarters, it will boost the company’s share price and also benefit the PowerShares QQQ (QQQ). Biogen makes up about 1.2% of QQQ’s total portfolio holdings.

In the next article, we’ll explore the performance of Biogen’s Tysabri and other multiple sclerosis drugs in 1Q16.

Continue to Next Part

Browse this series on Market Realist:

• Part 1 - How Did Biogen Perform in 1Q16?

• Part 3 - Tysabri Reports Strong Patient Growth in 1Q16

• Part 4 - Biogen’s Hemophilia Drugs Continue to Capture Market Share in 1Q16