Biogen exceeds estimates as Alzheimer's drug growth offsets MS decline
FY26 guidance of $15.25-$16.25 beats analyst consensus on cost-cutting and LEQEMBI momentum
Biogen shares slipped slightly on Friday despite the biotechnology company beating fourth-quarter earnings expectations and issuing a stronger-than-anticipated outlook for fiscal 2026, as investors weighed accelerating sales of its Alzheimer's treatment against continued pressure on its multiple sclerosis franchise.
The Cambridge, Massachusetts-based company reported adjusted earnings per share of $1.99 for the final quarter of 2025, surpassing analyst expectations of $1.61, while revenue reached $2.28 billion against a consensus estimate of $2.21 billion. According to company results, the performance was driven primarily by robust growth in its newer products.
More significantly for investors, Biogen projected fiscal 2026 EPS of $15.25 to $16.25, well above the analyst consensus of $14.92, signaling confidence that its turnaround strategy is gaining traction. The guidance reflects the impact of the company's "Fit for Growth" cost-cutting initiative, which has eliminated approximately 1,000 positions since launching in 2023 and is on track to deliver $1 billion in gross savings by the end of 2025, with $800 million in net savings after reinvestments in product launches and research and development.
The star performer in the quarter was LEQEMBI, Biogen's Alzheimer's disease therapy developed in partnership with Eisai. Global in-market sales for the treatment surged to $134 million in the fourth quarter, representing a 54% increase year-over-year, with US sales reaching $78 million. The strong performance came despite intensifying competition from Eli Lilly's Kisunla, which won FDA approval in July 2024 and has captured roughly 30% of new Alzheimer's patients.
"We are making meaningful progress executing against our strategic priorities, driving growth in our newer products while managing through the anticipated decline of our mature MS franchise," the company stated in its earnings materials.
That decline has been substantial. Biogen's multiple sclerosis business, which accounted for 45% of total revenue in 2024, has faced mounting pressure from generic competition for Tecfidera and biosimilar rivals for Tysabri. In the fourth quarter of 2024, MS sales fell 9% at constant currencies to just over $1 billion. The company has acknowledged that generic Tecfidera has already launched in several European markets, and it anticipates potential biosimilar entry for Tysabri in the US during the fourth quarter of 2025.
Vumerity, the company's newer oral MS therapy, has provided some offset, with sales increasing 13% in the fourth quarter of 2024 and maintaining its position as the leading branded oral therapy in the category. Still, analysts at Bernstein have forecast a low-to-mid single-digit revenue decline for fiscal 2026, though they expect low single-digit EPS growth driven by cost discipline.
The mixed dynamics help explain the muted market reaction to what was otherwise a strong earnings report. Biogen shares declined 0.05% to $185.36 on Friday, leaving the stock roughly 7% below its average analyst price target of $192.04, according to MarketBeat data. Bank of America maintained a "Neutral" rating and slightly reduced its price target from $189 to $187 ahead of the results.
Looking ahead, the Alzheimer's market presents both opportunity and challenge. The overall Alzheimer's therapeutics market is projected to grow from $3.94 billion in 2024 to $7.96 billion by 2033, according to market research. However, pricing pressures and reimbursement hurdles remain significant. Japan has announced plans to cut LEQEMBI's price by approximately 15% starting in November 2025, and neither LEQEMBI nor Kisunla has been recommended for National Health Service coverage in the UK due to cost-effectiveness concerns.
For Biogen, the fiscal 2026 guidance suggests management believes it can navigate these headwinds while continuing to build its business beyond multiple sclerosis. With a market capitalization of approximately $25.9 billion and a forward price-to-earnings ratio of 11.45, investors will be watching closely in coming quarters to see whether the company can maintain its momentum in Alzheimer's while successfully executing its broader transition strategy.