How Biogen Makes Money

A focus on a few world-class drugs for neurological disorders

Biogen Inc. (BIIB) is at the forefront of one of the world’s most important and least understood sectors, the biotechnology industry. With a market cap above $52 billion as of June 2021, the company’s product line consists of a handful of highly effective and very expensive drugs used to treat serious diseases including multiple sclerosis (MS) and Alzheimer's.

Biogen specializes in therapies for neurological and neurodegenerative diseases. Unlike the products of many pharmaceutical companies, Biogen's drugs are not mass-marketed on prime-time television. If you want help with anxiety or weight gain, Biogen can’t help you. If you have any of several debilitating conditions, it can.

  • Biogen is a biotechnology company that makes only a handful of advanced drugs to treat patients with neurological diseases.
  • More than half of Biogen's revenues come from its drugs used to treat multiple sclerosis (MS).
  • In mid-2021, Biogen received FDA approval for a new treatment for Alzheimer's disease.

Biogen's Financials

The year 2020 was not a great one for Biogen. It reported full-year revenues totaling $13.4 billion, a 6% decrease over the previous year. In 2021, it faces what it terms a "financial reset" with the introduction of a generic version of its most-prescribed MS drug therapy.

However, in June 2021 it received approval from the Food & Drug Administration for a new drug called aducanumab. It's the first new Alzheimer's drug to be approved by the agency in 17 years.

Several other major new products are in the pipeline.

Biogen's Q1 2021

In April 2021, Biogen announced quarterly earnings of $5.34 in non-GAAP diluted earnings per share, compared to $4.58 for the previous quarter. The company posted total revenues of $2.69 billion for the quarter ending March 2021, compared to revenues of $3.53 billion in the quarter one year previously. Net income came in at $410 million compared to about $1.7 billion a year earlier.

It reported gross profit for the quarter of $2 billion, a 28% decline compared to $3 billion in the same quarter a year previously.

Biogen's Business Segments

Biogen's business currently has eight segments, including seven devoted to specific products and one "other" category:

Its products, and their share of Biogen's 2020 revenues, include the following drugs used in the treatment of multiple sclerosis and hemophilia:

Biogen's Recent Developments

According to Biogen's own literature, 38% of multiple sclerosis sufferers worldwide use the company's drugs, earning the company $7.8 billion.

Tecfidera, which costs approximately $144 per daily dose and is the best-selling oral MS drug in the U.S., is beginning to compete with generics in 2021. It had been a multibillion-dollar contributor to Biogen’s revenues since its introduction in 2013 and contributed 36.01% of its revenues in 2020.

Tecfidera is just one of Biogen’s MS drugs, though, and each carries a price tag commensurate with huge research and development costs, scarcity, and usefulness.

Avonex is taken once a week by MS sufferers at a cost of approximately $7,500 per dose. Ampyra, formulated to make walking easier for MS sufferers, costs approximately $56 per tablet and is taken twice a day. Tysabri, a monthly infusion treatment administered by a professional, costs approximately $7,800 per dose.

Biogen claims that Tysabri has been administered more than two million times, thus accounting for a major component of the company’s revenue.

Biogen's Outlook

Now that its Alzheimer's treatment aducanumab has been approved for sale in the U.S., Biogen hopes to get approval to market it in several other countries. It calls this new drug "the first therapy to meaningful change the course of Alzheimer's disease."

The company is also touting its "broad neuroscience pipeline," with phase 3 trials underway for drugs to treat Alzheimer's, MS, Parkinson's Disease, neuropsychiatric disorders, and more.

Article Sources
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  1. Yahoo! Finance. "Biogen Inc (BIIB)."

  2. Biogen. "Form 10-K."

  3. Biogen. "SEC 10-Q Filing, Page 5."

  4. Biogen " First Quarter 2021 Financial Results and Business Update, Page 19."

  5. Biogen. "First Quarter 2021 Financial Results and Business Update, Page 24."

  6. "Tecfidera Prices, Coupons, and Patient Assistance Programs."

  7. "Avonex Pen Prices, Coupons, and Patient Assistance Programs."

  8. "Ampyra Prices, Coupons, and Patient Assistance Programs."

  9. "Tysabri Prices, Coupons, and Patient Assistance Programs."

  10. Biogen. "First Quarter 2021 Financial Results and Business Update, Page 7."

  11. Biogen. "First Quarter 2021 Financial Results and Business Update, Page 17."