Biogen tanks 6% in premarket trading despite an upbeat financial report

Biogen Inc. (NASDAQ: BIIB) released its earnings report for the first quarter on Wednesday that topped analysts’ estimates for earnings and revenue. Despite the upbeat financial report, the stock was reported 6% down in premarket trading on Wednesday.

The American multinational biotechnology company recorded £1.13 billion in net earnings in the first quarter that translates to £6.55 per share. In the same quarter last year, however, its net earnings were reported higher at £1.14 billion. According to FactSet, analysts had expected the company to print £1.10 billion (£6.24 per share) in quarterly net earnings.

Excluding items, the company registered its quarterly earnings at £7.41 per share versus £6.27 per share expected, as per Refinitiv.

Biogen Records A 1% Increase In Quarterly Revenue

On the revenue front, Biogen posted a 1% increase to £2.86 billion in the recent quarter. In the comparable quarter last year, it had reported £2.83 billion in quarterly revenue. FactSet’s consensus for revenue was capped at £2.77 billion in Q1.

The company also said that Spinraza (spinal muscular atrophy treatment) sales surged 9% in the first quarter to £458 million. Biogen also made an additional £810 million in revenue in Q1 attributed to a sharp increase in sales as consumers stockpiled prescriptions to prepare for the Coronavirus pandemic and the associated strict social distancing measures. The additional revenue, as per the company, came primarily from Europe.

Sales for Biogen’s Tecfidera (multiple sclerosis treatment) were also reported upbeat in the first quarter.

Biogen was originally scheduled to file for marketing approval of aducanumab in the first quarter of 2020. Owing to the ongoing health crisis, however, the company said on Wednesday that it will postpone the filing for its experimental drug for Alzheimer’s disease to the third quarter.

COVID-19 To Delay Biogen’s Ongoing Clinical Trials

According to the biotechnology company, the pandemic is expected to stretch the timeline for a few of its ongoing clinical trials.

At the time of writing, Biogen is exchanging hands at £235.50 per share in the stock market that almost matches the price at which it started the new year. The benchmark S&P 500 index, in comparison, is roughly 15% down year to date.

In late March, the stock had dropped to as low as £218 per share. Its performance in 2019 wasn’t too encouraging either with an annual gain of around 3%.

Biogen is currently valued at £39 billion and has a price to earnings ratio of 9.25.