Biogen (BIIB.US) Q3 results beat expectations, with strong sales of rare disease drugs.

Biogen (BIIB.US) released its third-quarter results before the market opened on October 28: total revenue of $2.804 billion, up 11% year-over-year and up 10% at constant currency, beating market expectations of $2.63 billion to $2.68 billion; adjusted diluted earnings per share of $2.62, above expectations of about $1.99, but down 46% year-over-year. Strong demand for the company's rare disease and Alzheimer's disease drugs helped offset the impact of declining sales of multiple sclerosis treatments. Affected by $284 million in acquired in-process research and development (IPR&D) expensesmainly from the acquisition of RayTherathe GAAP measure swung to a loss of $0.14 per share, compared with earnings of $3.17 per share in the year-ago period. The company generated approximately $600 million in free cash flow in the quarter and had net debt of approximately $6.4 billion at quarter-end. By business structure, the growth portfolio generated revenue of $1.26 billion, up 49% year-over-year, raising its share of core pharmaceutical revenue to 63%: SPINRAZA revenue was $461 million, up 23% year-over-year; LEQEMBI global sales were $202 million, up 67% year-over-year; among Apellis products, which were fully consolidated for the first time this quarter, SYFOVRE revenue was $191 million, up 27% year-over-year, with injection volume hitting a record high since launch. Meanwhile, the traditional multiple sclerosis business generated revenue of $919 million, down 13% year-over-year; biosimilars fell 16%. The drugmaker is looking to Syfovre and Empaveli, obtained through its recent $5.6 billion acquisition of Apellis Pharmaceuticals, as well as its rare disease drugs, to drive growth, as pricing pressure weighs on its aging multiple sclerosis portfolio. The eye disease drug Syfovre saw third-quarter sales rise 27% to $191 million; the kidney disease treatment Empaveli generated revenue of $52 million, up 92% year-over-year. Its rare disease portfolioincluding the genetic disease drug Skyclarys and the spinal muscular atrophy drug Spinrazahad sales of $676 million in the quarter, up 27% year-over-year. Chief Executive Officer Christopher Viehbacher expects late-stage clinical trial results due over the next year to support long-term growth, with multiple Phase III data readouts expected over the next 12 months, including topline results for litifilimab in lupus expected in early December. Analysts noted that the lupus drug litifilimab and the kidney disease treatment felzartamab are potential growth DRIVE. According to LSEG data, global sales of Leqembi, the Alzheimer's disease drug co-developed with Eisai, rose 67% year-over-year to approximately $202 million, beating the analyst average estimate of $130.6 million. Biogen is hoping for a recent U.S. approval of a more convenient subcutaneous formulation of Leqembi to drive patient uptake. Biogen raised the lower end of its full-year adjusted earnings per share guidance, lifting the floor of its 2026 adjusted profit forecast by 20 cents to a range of $12.20 to $13 per share, compared with its previous forecast of $12 to $13. The midpoint of the updated range is above the expected $12.36.