Leqembi finally "takes off"? Biogen (BIIB.US) Q1 performance exceeds pessimistic expectations, Alzheimer's drug sales surge by 74%

Pharmaceutical company Biogen (BIIB.US) released its first-quarter financial report on Wednesday, showing that Q1 revenue increased by 2% to $2.5 billion; adjusted earnings per share were $3.57, an 18% increase year-on-year, surpassing market average expectations both in revenue and profit. The sales growth of the Alzheimer's drug Leqembi and cost-cutting measures somewhat offset the pressure faced by the company's multiple sclerosis (MS) business segment. Due to expenses related to recent merger transactions, Biogen lowered its full-year profit forecast. Adjusted earnings per share are now expected to be between $14.25 and $15.25, down from the previous estimate of $15.25 to $16.25. The updated performance guidance includes expenses related to a recent deal aimed at gaining rights to sell felzartamab in the Chinese market, a drug being developed to treat rare immune diseases. The new guidance does not take into account the financial impact of Biogen's recent $5.6 billion acquisition of Apellis Pharmaceuticals, which is expected to be completed in the second quarter. Alzheimer's drug sales offset decline in MS business Previously, the market was concerned about how Biogen would hedge against the impact of declining revenue from its multiple sclerosis drugs, which account for about half of the company's product revenue, but are facing competition from generics. This performance is a positive signal to investors. After the financial report was released, Biogen's stock price rose over 4% in pre-market trading in the U.S., and as of the time of writing, the stock had risen 1.8%. Leqembi was approved for the treatment of Alzheimer's disease in 2023, achieving sales of $168 million in the first quarter, a 74% increase year-on-year. The drug had a slow start due to logistical challenges in the healthcare system and competition from a similar product by Eli Lilly (LLY.US). This drug, sold by Biogen in collaboration with the Japanese biotech company Eisai, has finally started to see growth. If Biogen can obtain regulatory approval in the U.S. and launch a more convenient home-use subcutaneous injection formulation of Leqembi for initial treatment of Alzheimer's patients, sales are expected to further accelerate. The FDA is expected to make an approval decision on this formulation next month. Cost savings and transaction layout Biogen maintains its full-year revenue guidance, expecting a mid-single-digit percentage decline in full-year revenue in 2026 compared to 2025 due to declining sales of multiple sclerosis drugs. Under the leadership of CEO Christopher Viehbacher, Biogen has implemented layoffs and eliminated some pipeline projects to save expenses. Meanwhile, the company is actively pursuing deals to expand treatment options in specific disease areas. Last month, Biogen agreed to acquire Apellis, expanding its therapy portfolio in immunology and rare disease areas. This is one of the largest acquisitions in Biogen's history. Sales of the rare disease drug Skyclarys, used to treat Friedreich's ataxia, were $151 million in the first quarter, exceeding analysts' expectations. Sales of Spinraza, a drug for treating spinal muscular atrophy (SMA), were $374 million, slightly lower than expected. Last month, the U.S. regulatory agency approved a high-dose version of the drug for treating this rare muscle disease, providing support for Biogen in its competition with Novartis AG's gene therapy.