(Reuters) – Biogen on Wednesday cut its annual profit forecast, which fell below Wall Street expectations, due to higher costs stemming from its recent acquisition of Reata Pharmaceuticals and the launch of Alzheimer’s treatment Leqembi.
To drive future growth, the pharmaceutical company is relying on newer products including Leqembi, postpartum depression drug Zurzuvae and rare disease treatments acquired through its $6.5 billion acquisition of Reata.
“We now have the elements to grow sustainably, so our focus is no longer on doing anything significant in mergers and acquisitions, at least for now,” CEO Christopher Vibacher said in a press conference.
Vibaker said Biogen plans to “expand further” into immunology and rare disease treatments by investing in research as well as through collaboration.
Biogen makes Leqembi in partnership with Japanese drugmaker Eisai and Zurzuvae with Sage Therapeutics.
Since he was appointed a year ago, Viehbacher has led efforts to cut expenses and help Biogen recover from its mistakes over the controversial Alzheimer’s drug Aduhelm, which received little attention.
“Whether or not the ‘new Biogen’ has arrived remains to be seen,” said BMO Capital Markets analyst Evan Segerman.
Biogen now expects to save $800 million from cost reductions by 2025, compared to a previous forecast of $700 million.
The costs associated with the deal brought Biogen’s expenses to $2.67 billion, more than double what they were a year ago.
However, the company beat market expectations for third-quarter earnings, benefiting from strong sales of its rare muscle wasting disorder drug, Spinraza, and higher contract manufacturing revenues.
Biogen expects full-year adjusted earnings per share to be between $14.50 to $15.00 compared to a previous forecast of $15 to $16. Analysts were expecting $15.26.
On an adjusted basis, the company earned $4.36 per share, beating expectations of $3.97, according to LSEG data.
Shares of the drugmaker fell slightly in choppy premarket trading.
(Reporting by Maryam Sunny and Bhanvi Satya in Bengaluru; Editing by Arun Kuyyur)
