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Biogen's Revenue Growth Stalled: Analyst Downgrade Cites Slow Leqembi Uptake

8 months ago2 min read

Key Insights

  • Needham downgraded Biogen, projecting flat revenue until 2026 due to limited growth catalysts and slow sales of Alzheimer's drug Leqembi.

  • Leqembi's Q3 global sales reached $67 million, with $39 million in the U.S., but physician feedback suggests a continued gradual uptake.

  • Skyclarys is projected to reach $116 million in Q4 sales and $608 million in 2025, while Zurzuvae's Q3 sales were $22 million.

Biogen faces a challenging financial outlook as Needham downgrades the stock, projecting flat revenue until 2026. The primary concern revolves around the slower-than-anticipated uptake of Leqembi (lecanemab), Biogen's Alzheimer's drug developed in collaboration with Eisai. This projection tempers market expectations despite recent positive developments, including a positive opinion from the European Medicines Agency (EMA) for lecanemab in early Alzheimer's disease.

Leqembi's Sales Growth Under Scrutiny

Leqembi's third-quarter global in-market sales totaled approximately $67 million, with $39 million originating from the U.S. market. However, Needham's analysis suggests that physician feedback and expert opinions indicate a continued slow pace of adoption. This sluggish growth is a critical factor in the revised revenue projections, as the market's initial expectations for Leqembi's performance were significantly higher.

Skyclarys and Zurzuvae: Promising but Not Enough

While new products like Skyclarys and Zurzuvae show promise, their growth is not expected to immediately offset the decline in Biogen's existing business. Needham projects Skyclarys' fourth-quarter sales to reach approximately $116 million and $608 million for 2025. Skyclarys, acquired through the Reata acquisition, generated $102.3 million in revenue during the third quarter. Zurzuvae, a postpartum depression drug, recorded $22 million in sales during the same period.

Financial Projections and Strategic Considerations

Needham anticipates revenues to decline slightly in 2024, remain stable in 2025, and increase by approximately 3% in 2026, contingent on sustained growth from key product launches. Operating margins are expected to improve by 80 basis points in 2025, driven by the Fit for Growth program. However, this improvement is already factored into market expectations. Business development activities could potentially bolster growth in the short to medium term, but the timing and nature of such deals remain uncertain.
The analyst has downgraded Biogen's stock from Buy to Hold, removing the previous price target of $270. This reflects a more cautious outlook on the company's near-term growth prospects, primarily due to the challenges in scaling Leqembi sales and the time required for new products to significantly impact overall revenue.
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