Biogen Shares Experience Significant 5% Drop in Pre-market Trading
Biogen shares are experiencing a significant 5% drop in premarket trading on Tuesday following the company’s disappointing earnings report for the latest quarter. The renowned biotechnology firm recorded fourth-quarter earnings of $2.95 per share, falling short of analysts’ expectations by $0.23. Additionally, the company’s quarterly revenue stood at $2.4 billion, significantly lower than the consensus estimate of $2.47 billion.
The decline in earnings per share was attributed to $0.35 in closeout costs for Aduhelm, a matter that had been previously disclosed by Biogen. Nevertheless, Biogen’s CEO, Christopher Viehbacher, emphasized the company’s achievements in 2023, stating that it was a transformative year, with the approval of four first-in-class medicines, a strategic cost realignment, prudent allocation of shareholder capital, and the reprioritization of the company’s pipeline. Viehbacher expressed confidence in Biogen’s ability to return to sustainable growth supported by these key elements.
Looking ahead, Biogen announced that it is expanding its portfolio in the rare disease sector with the introduction of Skyclarys, while Zurzuvae has shown promising early results in the United States. The company’s projected FY2024 earnings per share are anticipated to range between $15 and $16, differing from the consensus estimate of $15.64. Furthermore, it expects a decline in total revenue by a low- to mid-single digit percentage compared to 2023 and foresees core pharmaceutical revenue to be flat in contrast to 2023.
Despite the unfavorable earnings report, Biogen remains determined to overcome the setback and capitalize on its recent achievements to regain its position as a growth-driven enterprise.
Analyst comment
Negative news.
As an analyst, the market is likely to react negatively to Biogen’s disappointing earnings report. The 5% drop in premarket trading indicates investor concern. However, CEO Viehbacher’s emphasis on the company’s achievements and future plans may provide some optimism, but it remains to be seen if these efforts can lead to sustainable growth.
