BIOGEN INC. (BIIB) Q4 2024 Earnings Summary

Executive Summary

• Q4 2024 total revenue was $2.455B (+3% YoY); Non-GAAP diluted EPS was $3.44 (+17% YoY), with GAAP diluted EPS at $1.83 (+7% YoY) .
• Rare disease and biosimilars growth, plus LEQEMBI momentum, offset MS declines; LEQEMBI in‑market sales rose ~30% sequentially to $87M (U.S. $50M) as the IV maintenance label was approved, with subcutaneous maintenance PDUFA on Aug 31, 2025 .
• 2025 guidance: Non‑GAAP EPS $15.25–$16.25; total revenue down mid‑single digits; operating margin flat; combined Non‑GAAP R&D+SG&A ~$3.9B; FX headwind ~$0.35/share; Medicare Part D redesign impact ~$50–$100M .
• Cost of sales improved on lower idle capacity charges; Q4 non‑GAAP cost of sales was 22% of revenue vs 25% in Q4 2023, supporting strong free cash flow of $722M; cash $2.4B, net debt ~$3.9B .

What Went Well and What Went Wrong

What Went Well

• LEQEMBI delivered steady sequential growth: global in‑market sales ~$87M (+~30% q/q), U.S. $50M (+~28% q/q); IV maintenance label approved, with subcutaneous maintenance filing accepted (PDUFA Aug 31, 2025). “We have…LEQEMBI IV maintenance that’s now FDA‑approved” .
• SKYCLARYS global revenue reached ~$102M; “nearly doubled the number of patients on therapy globally vs year‑end 2023” and ex‑U.S. uptake strong; management is using AI and broader prescriber education to expand reach .
• Margin and cash generation improved: non‑GAAP cost of sales down to 22% of revenue, driven by lower idle capacity charges; free cash flow $722M in Q4, $2.7B for FY24 .

What Went Wrong

• MS revenue fell 8% YoY in Q4 to $1.070B on competition, with interferons pressured and TYSABRI impacted by EU biosimilar entry; TECDIFERA faces generic risks in Europe ahead .
• SKYCLARYS U.S. revenue ($71M) was sequentially impacted by channel inventory drawdown and Medicare discount dynamics, moderating quarter‑to‑quarter visibility despite strong patient additions .
• Other (income) expense was a GAAP ~$150M in Q4, including ~$78M net losses on strategic equity investments and ~$42M net interest expense, muting GAAP EPS leverage despite operating improvements .

Financial Results

Segment revenue (product) by category:

KPIs and cash metrics:

Narrative drivers:

• Cost of sales % improvement driven primarily by lower idle capacity charges; product mix shifts toward new launches helped FY trends .
• MS decline reflects competitive dynamics (biosimilars/generics) in interferons, TECFIDERA, and high‑efficacy class pressures; TYSABRI impacted in EU .
• SKYCLARYS global strength; U.S. sequential dip due to inventory drawdown and Medicare discounts .
• LEQEMBI demand trajectory supported by capacity initiatives and diagnostics; catalysts include IV maintenance approval and pending subcutaneous maintenance .

Guidance Changes

Earnings Call Themes & Trends

Management Commentary

• “We have the LEQEMBI IV maintenance that’s now FDA‑approved…subcutaneous maintenance…PDUFA date on August 31 [2025]…a major game changer we see is the subcutaneous [initiation]…in the first half of next year” .
• “Revenue from our launch products really offset the decline in our multiple sclerosis product revenue…our core pharma business actually grew…for the first time in 4 years” .
• “Global SKYCLARYS revenue…$102 million, an increase of 83% versus the fourth quarter of 2023 with nearly double the number of patients on therapy…U.S. SKYCLARYS…was sequentially impacted by an inventory build…as well as some Medicare discount dynamics” .
• “Non‑GAAP diluted EPS was $3.44…free cash flow in the quarter [was] $722 million…we ended 2024 with $2.4 billion of cash and roughly $3.9 billion of net debt” .
• “Our early‑stage development pipeline is still relatively thin…we can do more of the HI‑Bio type transactions…we don’t feel any particular pressure to do [large] deals” .

Q&A Highlights

• External BD capacity and pipeline balance: Balance sheet “in excellent shape” with $2.4B cash, EBITDA >$3B; disciplined approach favoring assets with solid Phase II data; ability for multiple smaller or a larger transaction if financially sound .
• LEQEMBI diagnostics: Near‑term IVD blood tests (Fujirebio filed; others progressing) to reduce PET/LP reliance; focus on payer reimbursement and concordance with Medicare populations .
• Royalty Pharma funding: ~$200M expected 2025 R&D relief accounted as R&D reduction; viewed as a one‑off de‑risking model to add “shots on goal” .
• SKYCLARYS U.S. growth levers: AI‑enabled patient identification, expanded genetic testing, omni‑channel physician education; ex‑U.S. reimbursement progressing across EU/LatAm .
• SPINRAZA strategy: High‑dose regimen reduces loading doses from 4 to 2; device (port) targeted for ~2026 to simplify intrathecal delivery; U.S. Q4 growth +6% YoY .
• 2025 OpEx/margins: Combined Non‑GAAP R&D+SG&A ~$3.9B; non‑GAAP operating margin flat YoY; first quarter seasonally pressured on discounts/allowances .

Estimates Context

• S&P Global consensus EPS and revenue estimates for Q4 2024 and FY 2025 were unavailable at time of analysis due to an API limit, so a direct comparison to Wall Street estimates is not provided. We attempted to retrieve “Primary EPS Consensus Mean” and “Revenue Consensus Mean” for Q2–Q4 2024 and FY 2025, but the request encountered a daily limit error.
• Given the reported outperformance in non‑GAAP EPS (+17% YoY) and rare disease growth, estimate revisions may need to account for LEQEMBI’s trajectory, SKYCLARYS ex‑U.S. strength, and MS erosion pacing (including U.S. TYSABRI biosimilar timing and TECFIDERA EU generics) .

Key Takeaways for Investors

• LEQEMBI is a growing contributor with multiple near‑term catalysts: IV maintenance label is in place; subcutaneous maintenance PDUFA Aug 31, 2025; diagnostics could unlock capacity; expect continued steady quarter‑over‑quarter progress absent major new bottlenecks .
• SKYCLARYS ex‑U.S. growth offsets U.S. lumpiness; AI‑driven identification and expanding geographies support durable trajectory—watch Medicare discount impacts and quarterly inventory effects for trading setups .
• MS decline remains the primary headwind; 2025 revenue guide (mid‑single digit down) reflects U.S. TYSABRI biosimilar and TECFIDERA EU generic risks—position around potential launch/decision milestones .
• Margin and cash discipline: lower idle capacity charges and Fit for Growth savings support FCF; Q4 free cash flow of $722M and FY24 $2.7B underpin BD capacity without leverage stress .
• 2025 set‑up: EPS $15.25–$16.25 with flat operating margin and $3.9B Non‑GAAP OpEx; near‑term seasonality likely pressures Q1—model discounts/allowances and FX ($0.35 headwind) .
• Pipeline confidence rising: lupus (dapirolizumab pegol), felzartamab indications, and Alzheimer’s next‑gen candidates (tau) diversify beyond MS—medium‑term thesis hinges on pivotal readouts beginning 2026 .
• Trading implications: Near‑term catalysts include LEQEMBI subcu maintenance (late Q3’25), diagnostics adoption, and U.S. TYSABRI biosimilar timing; watch ex‑U.S. LEQEMBI uptake and SKYCLARYS approvals in LatAm/EMEA for upside skew .

Sources

• Q4 2024 8‑K press release and exhibits: financials, segments, guidance, cash flow .
• Q4 2024 earnings call: commercialization updates, SKYCLARYS/LEQEMBI commentary, guidance assumptions .
• Prior quarters: Q3 2024 8‑K (financials/segments) ; Q2 2024 8‑K (financials/segments) .
• Relevant press releases: LEQEMBI CHMP positive opinion (Nov 2024) ; Mexico approval (Dec 2024) .