Shares of Biogen (NASDAQ:BIIB) hardly moved following the release of second-quarter earnings results that beat Wall Street's expectations on the top and bottom lines.
Revenue rose 1.7% year over year to $3.7 billion, exceeding the average analyst estimate by $240 million. Adjusted earnings rose 12% to $10.26 per share, $2.25 per share higher than expected.
IMAGE SOURCE: GETTY IMAGES.
Despite that outperformance, the stock was close to flat in mid-afternoon trading Wednesday, down 0.3% as of 2:15 p.m. EDT, because investors aren't expecting double-digit-percentage earnings growth to continue much longer. Sales of the company's multiple sclerosis drugs still provide 58% of its revenue, and they fell a combined 3.5% year over year to $2.1 billion.
Biogen also receives royalties from Roche (OTC:RHHB.Y) for sales of Ocrevus, a biannual injection that's putting pressure on sales of Biogen's multiple sclerosis therapies. Those royalties rose 14% to $208 million in the quarter, but they can't carry Biogen forward on their own.
Spinraza, a lifelong treatment for spinal muscular atrophy (SMA) was Biogen's lead growth driver before a once-and-done gene therapy from Novartis (NYSE:NVS) called Zolgensma became the second SMA treatment to earn approval last year. In the second quarter, sales of Spinraza rose just 1% to $495 million.
Earlier this month, Biogen submitted an application to the FDA for its experimental Alzheimer's disease treatment, aducanumab. As potentially the first disease-modifying therapy for Alzheimer's disease, sales of aducanumab could solve all of Biogen's problems, but its approval is far from guaranteed.
10 stocks we like better than Biogen Inc.
When investing geniuses David and Tom Gardner have a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has tripled the market.*
David and Tom just revealed what they believe are the ten best stocks for investors to buy right now… and Biogen Inc. wasn't one of them! That's right -- they think these 10 stocks are even better buys.
