BIOGEN INC. (BIIB) Q2 2025 Earnings Summary

Executive Summary

• Q2 2025 delivered solid top- and bottom-line growth: total revenue $2.65B (+7% YoY) and non-GAAP diluted EPS $5.47 (+4% YoY), with GAAP diluted EPS $4.33 (+8% YoY) .
• Biogen raised FY2025 guidance: non-GAAP EPS to $15.50–$16.00 (from $14.50–$15.50) and total revenue to ~flat at constant currency (from mid-single-digit decline), reflecting stronger business outlook and resilient U.S. MS performance; prior guidance in May had been lowered due to the Stoke upfront .
• Launch products drove momentum: LEQEMBI global in‑market sales ~$160M (incl. ~$35M one-time China shipment), U.S. ~$63M; SKYCLARYS ~$130M; ZURZUVAE $46M; U.S. MS revenue $657M benefited from ~$75M favorable gross-to-net and inventory timing .
• Near-term catalysts: LEQEMBI subcutaneous autoinjector PDUFA Aug 31, 2025, positive CHMP opinion for ZURZUVAE in EU, and an investor event on lupus assets set for Sept 3, 2025 .

What Went Well and What Went Wrong

What Went Well

• Guidance raised on stronger business outlook; non-GAAP EPS up $0.87 versus prior view, partially offset by ~($0.12) impact from City Therapeutics transaction .
• Launch products posted robust sequential growth: ZURZUVAE +68% QoQ to $46M; SKYCLARYS global ~$130M; LEQEMBI U.S. ~$63M with global ~$160M supported by market infrastructure maturation (greater PET, BBM adoption) .
• CEO emphasized portfolio transformation and disciplined cost management: “We delivered another quarter of strong execution… continued growth of our launch products, and meaningful strides expanding and advancing our late-stage pipeline” .

What Went Wrong

• Ex‑U.S. MS headwinds persisted and are expected to accelerate in H2 2025, particularly TECFIDERA in Europe and TYSABRI biosimilar pressure; total MS revenue down 4% YoY in Q2 .
• Cost of sales rose as % of revenue (GAAP 23%, non-GAAP 21%) due to product mix and elevated contract manufacturing ahead of planned Q4 plant maintenance, pressuring gross margins .
• Q2 collaboration profit sharing was a net expense of ~$75M (Samsung Bioepis ~$57M; Sage ~$18M), and non-GAAP other expense ~$57M driven by net interest expense, modestly weighing on EPS leverage .

Financial Results

Values with asterisk retrieved from S&P Global.

Guidance Changes

Earnings Call Themes & Trends

Management Commentary

• CEO: “We delivered another quarter of strong execution… continued growth of our launch products, and meaningful strides expanding and advancing our late-stage pipeline.”
• CFO: “Absent the approximately $0.26 impact from acquired IPR&D upfront and milestone expense, non-GAAP diluted EPS would have been $5.73, up 9%.”
• Head of North America: “We believe sites are making progress… PET testing has increased ~fivefold… BBM testing has grown by 50% in the past six months.”
• Head of Development: “We are now progressing salanersen to registrational studies in SMA following exciting interim Phase 1b results… all three Phase 3 studies for felzartamab initiated.”

Q&A Highlights

• LEQEMBI vs donanemab: Leqembi maintains ~70% market share; competitor growth concentrated among existing sites; modified titration safety differences not clearly distinct per AAIC indirect comparison .
• Blood-based biomarkers: Rapid adoption for triage; need payer clarity for confirmatory use; multiple tests meet 90% sensitivity/specificity per new guidelines; potential to accelerate diagnosis pathways .
• Subcutaneous LEQEMBI logistics: Autoinjector human factors supportive of patient/caregiver self-administration; physicians will tailor initiation setting based on ARIA management competency and patient support .
• Lupus portfolio: Dapirolizumab second Phase 3 data expected 2027–2028; lutophilimab SLE data as early as late next year; heterogeneity and efficacy focus over route (oral vs injectable) .
• Eisai relationship: Arbitration on EU commercialization allocation proceeding under contract; collaboration remains strong across committees, manufacturing and development .

Estimates Context

• Q2 2025 beat vs consensus: revenue $2.65B vs $2.32B*, and non-GAAP EPS $5.47 vs $3.88*; strength driven by U.S. MS one-time favorabilities (~$75M) and launch product growth, partly offset by higher cost of sales mix .
• FY 2025 estimates likely to shift upward on EPS (raised range) and revenue trajectory (from decline to ~flat CC), while modeling for minimal Q4 contract manufacturing revenue and rising R&D investment in rare disease .
  Values with asterisk retrieved from S&P Global.

Key Takeaways for Investors

• The quarter was a clear beat on revenue and EPS vs consensus, with non-GAAP EPS uplift even after ~$47M acquired IPR&D drag; underlying operating momentum is strengthening .
• Guidance raise and improved revenue outlook to ~flat CC de‑risk FY 2025, though ex‑U.S. MS headwinds in H2 and minimal Q4 contract manufacturing revenue should temper extrapolation .
• LEQEMBI’s adoption curve is steepening as infrastructure scales (PET/BBM growth, DTC activation); SubQ PDUFA on Aug 31, 2025 adds convenience and potential share defense vs competition .
• SKYCLARYS growth broadening via community prescribers; ZURZUVAE’s CHMP positive opinion opens EU optionality; watch EU reimbursement pacing and IQVIA shipment methodology changes .
• Pipeline catalysts (salanersen registrational path; felzartamab multiple Phase 3s; lupus assets) support medium-term growth optionality; incremental R&D spend is strategic, not merely overhead .
• Balance sheet remains solid (cash ~$2.8B, net debt ~$3.5B); interest expense to be modestly higher post debt refinancing, but FCF generation intact .
• Near-term trading lens: Focus on SubQ LEQEMBI outcome, execution of U.S. MS while one-time benefits normalize, and ZURZUVAE EU decision; medium-term thesis hinges on Alzheimer’s trajectory plus rare disease execution and lupus readouts .

Additional Relevant Press Releases (Q2 context)

• Real-world and four-year LEQEMBI data at AAIC, including sustained benefits and safety profile consistency over long-term treatment .
• Biogen $2B manufacturing investment in North Carolina to modernize and expand capabilities (ASO, fill-finish, automation/AI) .