Biogen’s investors are growing restless.
Wednesday’s third-quarter earnings call checked most of the boxes for a successful report. The company raised its full-year guidance, and sales of its Alzheimer’s drug Leqembi (partnered with Eisai) continued to grow modestly.
But in a sign investors may be getting antsy over CEO Chris Viehbacher’s strategy, the biotech faced multiple questions from analysts about whether its R&D pipeline can deliver the type of growth stockholders are seeking.
Viehbacher acknowledged on the earnings call that Biogen is “in one of those classic situations in our industry” where a company attempts to bridge a dwindling legacy portfolio with a largely early-stage pipeline. He emphasized that Biogen isn’t content to just wait for all the readouts to come over the next few years, and reiterated that the company has
$8 billion to $10 billion
for potential acquisitions and partnerships through the end of 2025.
But that can’t be just acquiring near-term sales, he said.
“We’re not really interested in just buying revenue,” Viehbacher said. “If we can buy growth and we can make a very good return on investment, then we’ll do so. But as you know, assets get pretty highly priced as they get close to the market, so you have to do an awful lot of digging and an awful lot of looking, and that’s what we are doing.”
Viehbacher was announced as Biogen’s CEO in November 2022, just a few weeks after the company announced its first Phase 3 data for Leqembi. He’ll celebrate his second anniversary next month, and over his time leading the company, the stock
$BIIB
has declined by almost 40%.
Stifel analyst Paul Matteis highlighted the unease in the investment community, writing in a note Wednesday morning that the longer timelines for Alzheimer’s and the pipeline make Biogen “a contrarian stock.” But he said the “big picture” is still encouraging for the company.
Turning things around will be no easy task. When Viehbacher took over, Biogen was reeling in the wake of a disastrous Alzheimer’s drug rollout in Aduhelm, corporate governance issues and a number of pipeline setbacks, as well as expiring patents and dwindling sales for its top-selling drug Tecfidera. During his two years, the CEO has preached patience and discipline by cutting costs, reorganizing top R&D posts and trimming the pipeline to make Biogen more agile and focused.
On Wednesday’s call, however, one pipeline asset — the lupus program dapirolizumab pegol — drew particular skepticism. Evercore’s Umer Raffat asked why Biogen is highlighting the drug when most of the excitement in lupus is centered around CAR-T and CD19 approaches.
Viehbacher likened the situation to when he was at GSK working on another lupus drug called Benlysta. GSK, he said, almost stopped developing that drug due to modest efficacy, but everything else in the space ended up failing.
“We have to wait and see who actually gets to the finish line,” Viehbacher said. “On CAR-T, it’s some interesting data, but the logistics of CAR-T are not yet such that you’re going to be seeing significant numbers of patients being treated, in my personal opinion.”
In addition to dapirolizumab pegol, Biogen highlighted its Alzheimer’s program BIIB080, another lupus candidate called litifilimab, and a recently acquired antibody known as felzartamab as potential revenue drivers.
Execs said Wednesday that the combined peak revenue of these four assets is projected to reach $14 billion, though Viehbacher declined to break that figure down by program.
Biogen shares fell as much as 3% in Wednesday trading, but rebounded slightly to about a 1.5% decrease.