Biogen faces revenue decline but focuses on future growth

USA – Biogen has warned that its earnings and sales will decline in 2025, mainly due to falling revenue from its multiple sclerosis (MS) products.

The company expects sales to drop by a mid-single-digit percentage from the US $9.7 billion reported in 2024. Following this announcement on Wednesday, Biogen’s shares fell by more than 4%.

Despite the challenging outlook, CEO Chris Viehbacher remained optimistic, emphasizing the company’s efforts to reallocate resources for future growth.

“Our financial discipline has enabled a restructuring of our operating expenses with a reallocation of resources toward potential future growth drivers,” he said.

New product launches drive growth

Biogen is counting on newly launched products to boost revenue. Leqembi, its Alzheimer’s disease therapy, generated US $87 million in the fourth quarter of 2024, including US $50 million from US sales. Biogen described this as “good continued sequential growth.”

Another promising product is Skyclarys, a treatment for Friedreich’s ataxia, which brought in US $102 million in sales during the same period.

However, this fell short of expectations, which were around US $112 million. The company attributed lower-than-expected US sales ($71 million) to Medicare discount adjustments and stockpiling.

Meanwhile, Zurzuvae, Biogen’s postpartum depression drug, recorded US $22.9 million in revenue, also below the predicted US $26 million.

Overall, Biogen’s total revenue grew 3% to US $2.5 billion in the fourth quarter, surpassing expectations of US $4.1 billion.

However, MS drug sales dropped by 8% to US $1.1 billion. The company reported a net income of US $267 million, up from US $250 million in the previous year.

Strategic moves and cost-cutting efforts

To offset declining MS revenue, Biogen is investing in late-stage drug development programs. On Wednesday, the company announced a partnership with Royalty Pharma to advance the development of litifilimab, an anti-BDCA2 monoclonal antibody for lupus.

Additionally, Biogen has been cutting costs through a restructuring initiative launched in 2023, which is expected to save US $1 billion by the end of 2025.

The company recently revamped its research division, prioritizing a smaller preclinical portfolio while shifting resources to external collaborations.

Pipeline restructuring and R&D adjustments

Alongside its financial report, Biogen revealed that it is discontinuing several drug development programs as part of its pipeline prioritization efforts. The following projects have been halted:

• BIIB113 (early Alzheimer’s disease)
• BIIB094 (early Parkinson’s disease)
• BIIB101 (multiple system atrophy)
• BIIB143 (cemdomespib) (diabetic peripheral neuropathic pain)

Priya Singhal, Head of Development at Biogen, explained the reasoning behind these decisions: “We have focused our development efforts on a smaller set of clinical-stage programs that we believe are high conviction and well positioned to deliver a regular cadence of pivotal readouts and potential launches.”

Analyst reactions and future strategy

Analysts believe that Biogen’s pipeline adjustments suggest a shift toward external acquisitions.

RBC Capital Markets analyst Brian Abrahams noted, “The story is getting cleaner and more focused. While nothing overly exciting in the print, the stage feels set for an improving narrative, and sentiment/stock seems to be at a bottom.”