Biogen (BIIB) Tops Q3 EPS by 68c; Announces Corp. Restructuring; Boosts FY15 EPS Outlook
Biogen (NASDAQ: BIIB) reported Q3 EPS of $4.48, $0.68 better than the analyst estimate of $3.80. Revenue for the quarter came in at $2.39 billion versus the consensus estimate of $2.65 billion.
Corporate Restructuring
The Company plans to substantially complete the majority of the 11% reduction of its global workforce by the end of 2015. The Company is in the process of notifying employees affected by the restructuring, and has initiated the required consultation processes in European countries where employees may be impacted. Biogen has also discontinued several programs, including its Phase 3 program for TECFIDERA in secondary progressive MS, the development of anti-TWEAK in lupus nephritis, and certain activities in immunology and fibrosis research.
Implementing these changes is expected to reduce the current annual run rate of operating expenses by approximately $250 million. Biogen expects to incur a charge of approximately $85-$95 million, primarily in the fourth quarter of 2015.
Additionally, the Company plans to identify additional savings in non-labor expenses by the end of the year.
The restructuring is expected to yield savings for 2016 and beyond and provides additional financial flexibility to support marketed therapies and focus on a number of meaningful pipeline opportunities, including:
- Commercial initiatives aimed at increasing sales of TECFIDERA including new direct to consumer marketing programs;
- Aducanumab in Phase 3 for Alzheimer’s disease;
- BAN2401 in Phase 2 for Alzheimer’s disease;
- E2609 in Phase 2 for Alzheimer’s disease;
- SMN-Rx in Phase 3 for spinal muscular atrophy;
- Anti-LINGO in Phase 2 for multiple sclerosis;
- Subject to deal closure, MT-1303, a Phase 3 ready asset for inflammatory bowel disease with potential further development in MS; and
- Raxatrigine (CNV1014802), a Phase 3 ready asset for trigeminal neuralgia and Phase 2b ready for lumbar radiculopathy.
Guidance:
Biogen sees FY2015 EPS of $16.20-$16.50, versus the consensus of $15.84.
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