Biogen (NASDAQ: BIIB) earnings release for the 1st quarter of their 2020 fiscal year
About Biogen
At Biogen, our mission is clear: we are pioneers in neuroscience. Biogen discovers, develops, and delivers worldwide innovative therapies for people living with serious neurological and neurodegenerative diseases as well as related therapeutic adjacencies. One of the world’s first global biotechnology companies, Biogen was founded in 1978 by Charles Weissmann, Heinz Schaller, Kenneth Murray, and Nobel Prize winners Walter Gilbert and Phillip Sharp, and today has the leading portfolio of medicines to treat multiple sclerosis, has introduced the first approved treatment for spinal muscular atrophy, commercializes biosimilars of advanced biologics, and is focused on advancing research programs in multiple sclerosis and neuroimmunology, neuromuscular disorders, movement disorders, Alzheimer’s disease and dementia, ophthalmology, immunology, neurocognitive disorders, acute neurology, and pain.
Overview of Biogen's 1st quarter 2020 earnings report
Data below refers to quarterly data unless specified otherwise:
- Revenue: $3.534 billion (up from $3.489billion for the same period of the previous year)
- Revenues increased by 1.2% over the last 12 months
- Expenses: $1.714 billion (down from $1.987 billion for the same period of the previous year)
- Expenses decreased by -13.7% over the last 12 months
- Net earnings: $1.399 billion (up from $1.408 billion for the same period of the previous year)
- Diluted earnings per share: $8.08 (up from $7.15 for the same period of the previous year)
- PE ratio: 9.24
- Diluted weighted-average shares outstanding: 173.1 million (down from 197 million for the same period of the previous year)
- Cash and cash equivalents: $3.860 billion
- Cash and cash equivalents per share: $22.29
- Cash and cash equivalents makes up 7.45% of Biogen's market capital
- Cash and cash equivalents makes up 14.8% of Biogen's total assets
- Accounts receivable: $2.604 billion
- Accounts receivable makes up 9.98% of Biogen's total assets
- Stockholders equity in Biogen: $12.536 billion
- Stockholders equity per share: $72.42
- So Biogen is trading a 4.1 times its stockholders equity which is just outside the expected range of between 2 and 4 which most firms ten to trade at.
- For some perspective the S&P500 average price to book value is at 3.34. Read more about the S&P500 here.
Biogen's management commentary on their 1st quarter 2020 earnings report
Cambridge, Mass., April 22, 2020 -- Biogen Inc. (Nasdaq: BIIB) today reported first quarter 2020 financial results. “The COVID-19 pandemic has created a challenging situation for people and companies throughout the world, and Biogen personally felt the painful impact of this global crisis. During these challenging and unprecedented times, Biogen has continued to deliver on its mission and purpose,” said Michel Vounatsos, Biogen’s Chief Executive Officer. “We have continued to operate our business and deliver our therapies to patients across the world and are especially grateful to our dedicated employees as we continue to execute on our strategy.”
Mr. Vounatsos added, “We delivered strong financial results in the first quarter, and we continued to develop and expand our pipeline, including making good progress toward the U.S. regulatory filing for aducanumab, as well as bolstering our efforts in gene therapy through a collaboration with Sangamo. The magnitude and uncertainty surrounding this pandemic clearly introduce unanticipated and potentially unquantifiable risks to our business and results over the near-term. That said, we believe that compelling opportunities exist in the therapeutic areas we are pursuing. This crisis has had a profound impact on our organization and the world at large. We have taken a broad set of actions, and we will remain fully engaged.”
Potential Business Impacts of COVID-19
Biogen has continued to operate its business to serve the needs of patients and has been continually monitoring for potential impacts: • Supply chain: Biogen has continued to operate its manufacturing facilities and is working with organizations across its supply chain to maintain continuity, while continuing to closely monitor the evolving situation. • Regulatory interactions: Biogen is continuing its frequent interactions with regulatory authorities, including for aducanumab. • Clinical trials: Biogen is working on a case-by-case basis to continue safely advancing as many of its clinical trials as possible. To help mitigate the impact to its clinical trials, the Company is pursuing innovative approaches such as remote monitoring, remote patient visits, and supporting home infusions. While Biogen does expect there will be some impact to timelines for some of its clinical programs, it still expects the vast majority of the 10 remaining near-term readouts to occur before the end of 2021.
Potential Business Impacts of COVID-19
Biogen has continued to operate its business to serve the needs of patients and has been continually monitoring for potential impacts: • Supply chain: Biogen has continued to operate its manufacturing facilities and is working with organizations across its supply chain to maintain continuity, while continuing to closely monitor the evolving situation. • Regulatory interactions: Biogen is continuing its frequent interactions with regulatory authorities, including for aducanumab. • Clinical trials: Biogen is working on a case-by-case basis to continue safely advancing as many of its clinical trials as possible. To help mitigate the impact to its clinical trials, the Company is pursuing innovative approaches such as remote monitoring, remote patient visits, and supporting home infusions. While Biogen does expect there will be some impact to timelines for some of its clinical programs, it still expects the vast majority of the 10 remaining near-term readouts to occur before the end of 2021.
Biogen (NASDAQ: BIIB) stock price history
The image below, obtained from Google, shows the stock price history of Biogen over the last 5 years. And it's not been a very good time for Biogen stockholders. 5 years ago the stock was trading at around $370 a stock and its currently trading at $298.93 a stock. That's a loss of -19.2% suffered by Biogen stockholders over the last 5 years.
The stock of Biogen is trading at close to the midpoint between its 52 week low and 52 week high which to us is a clear indication that the short term sentiment and momentum of Biogen Inc stock is neutral at this point in time.
The stock of Biogen is trading at close to the midpoint between its 52 week low and 52 week high which to us is a clear indication that the short term sentiment and momentum of Biogen Inc stock is neutral at this point in time.
Recent coverage of Biogen
The extract below covers the latest regarding Biogen as obtained from Bizjournals.com
Alzheimer’s disease patients will have to wait a little longer for Biogen’s new drug, which is now expected to be submitted for FDA approval in the fall.
Biogen (Nasdaq: BIIB) previously told investors during during a January earnings call that it expected to ask the FDA to approve its Alzheimer's drug aducanumab in "early 2020." But the biotech is now scheduled to meet with regulatory authorities this summer before finalizing its rolling application in the third quarter of the year, according to CEO Michel Vounatsos.
The company’s stock price dropped close to 8% when markets opened Wednesday. Multiple analysts said they were unsurprised by the delay. SVB Leerink's Marc Goodman wrote that he still expects a positive outcome for the drug, as "Biogen has already started to submit modules and the FDA is working closely with Biogen... We still expect the turnaround time on approval will be fairly quick."
Biogen executives said that Covid-19 has played a small part in the delay — a few members of the aducanumab application team were among the 100-plus employees who contracted Covid-19, according to Al Sandrock, Biogen’s executive vice president. But the delay was largely attributed to what Vounatsos called a “complex and unprecedented dataset.” “Timing is not easy to predict. We were trying to do that since the initial announcement in October, and this is an unusual process…. I wouldn’t read too much else into this,” Sandrock said.
Read the full article here
Alzheimer’s disease patients will have to wait a little longer for Biogen’s new drug, which is now expected to be submitted for FDA approval in the fall.
Biogen (Nasdaq: BIIB) previously told investors during during a January earnings call that it expected to ask the FDA to approve its Alzheimer's drug aducanumab in "early 2020." But the biotech is now scheduled to meet with regulatory authorities this summer before finalizing its rolling application in the third quarter of the year, according to CEO Michel Vounatsos.
The company’s stock price dropped close to 8% when markets opened Wednesday. Multiple analysts said they were unsurprised by the delay. SVB Leerink's Marc Goodman wrote that he still expects a positive outcome for the drug, as "Biogen has already started to submit modules and the FDA is working closely with Biogen... We still expect the turnaround time on approval will be fairly quick."
Biogen executives said that Covid-19 has played a small part in the delay — a few members of the aducanumab application team were among the 100-plus employees who contracted Covid-19, according to Al Sandrock, Biogen’s executive vice president. But the delay was largely attributed to what Vounatsos called a “complex and unprecedented dataset.” “Timing is not easy to predict. We were trying to do that since the initial announcement in October, and this is an unusual process…. I wouldn’t read too much else into this,” Sandrock said.
Read the full article here
Biogen (NASDAQ: BIIB) latest stock valuation
So what is Biogen's stock worth based on the release of their 1st quarter 2020 earnings report? Based on Biogen's latest earnings report our valuation models provide a target (full value) price for Biogen's stock at $368.90 a stock. We therefore believe that the stock of Biogen is undervalued.
We usually suggest that long term and fundamental investors get in at least 10% below our target (full value) price which in this case is $368.90. Therefore we believe a good entry point into Biogen's stock is at $332 or below. Since the stock of Biogen is trading at well below our recommended entry price we rate Biogen's stock as a buy
We usually suggest that long term and fundamental investors get in at least 10% below our target (full value) price which in this case is $368.90. Therefore we believe a good entry point into Biogen's stock is at $332 or below. Since the stock of Biogen is trading at well below our recommended entry price we rate Biogen's stock as a buy
Next earnings release date for Biogen
It is expected that Biogen's 2nd quarter 2020 earnings report will be released in late July 2020