Biogen Beats Q1 Earnings Estimates as Growth Products Surge 12%

Biogen (NASDAQ: BIIB) delivered stronger-than-expected first quarter 2026 results, with Non-GAAP earnings per share of $3.57 representing an 18% year-over-year increase. The biotechnology company's growth product portfolio demonstrated strong commercial momentum, offsetting continued pressure in its mature multiple sclerosis franchise.

Key Numbers

Biogen reported first quarter 2026 total revenue of $2.5 billion, up 2% year-over-year, beating consensus expectations. Non-GAAP diluted earnings per share reached $3.57, an 18% increase from $3.02 in the prior year period. On a GAAP basis, the company delivered EPS of $2.15, up 31% year-over-year.

The company's growth products portfolio, which includes LEQEMBI, SKYCLARYS, ZURZUVAE, VUMERITY, and SPINRAZA, generated 12% year-over-year growth, demonstrating successful commercial execution. LEQEMBI, the Alzheimer's treatment developed with Eisai, saw global in-market sales surge 74% to $168 million, with U.S. sales of $86 million showing continued sequential improvement.

SKYCLARYS revenue climbed 22% to $151 million driven by demand growth, while ZURZUVAE doubled its revenue to $55 million despite inventory dynamics impacting sequential sales. VUMERITY posted impressive 29% growth to $179 million, though SPINRAZA declined 12% to $374 million due to timing of international shipments.

The traditional multiple sclerosis portfolio remained relatively stable at $958 million, flat year-over-year, though the company benefited from approximately $59 million in favorable inventory timing and discount adjustments for TYSABRI. Operating margins improved, with Non-GAAP cost of sales representing 25% of revenue compared to 24% in the prior year, though this increase was primarily attributed to product mix shifts.

What Management Said

President and CEO Christopher A. Viehbacher emphasized the company's transformation progress, stating: "We significantly advanced our transformation into the New Biogen through strong commercial and pipeline execution and the announcement of our intent to acquire Apellis. We believe the planned acquisition of Apellis will bolster our revenue and earnings growth, adding two differentiated commercial medicines and deepening the foundation for felzartamab, our key Phase 3 asset in kidney disease."

Management highlighted several pipeline achievements during the quarter. The company reported positive Phase 2 data for litifilimab in cutaneous lupus erythematosus (CLE), potentially representing the first targeted therapy for this disease if approved. Additionally, salanersen showed unprecedented motor milestone achievements in children with spinal muscular atrophy who had suboptimal response to prior gene therapy.

Real-world persistence data for LEQEMBI proved encouraging, with approximately 78% of patients continuing treatment at 18 months, with the majority transitioning into the maintenance phase. This metric is particularly important for demonstrating the drug's tolerability and perceived value in clinical practice.

The company also secured FDA approval for SPINRAZA's high-dose regimen in the United States, following earlier approvals in Japan and the European Union, potentially expanding the treatment's utility in the SMA patient population.

What to Watch

Biogen updated its full-year 2026 guidance to reflect ongoing business development activities, now expecting Non-GAAP diluted EPS between $14.25 and $15.25, down from the previous range of $15.25 to $16.25. The reduction primarily reflects approximately $1.00 in acquired in-process R&D charges, including $0.20 recorded in Q1 and an expected $0.80 in Q2, related to the TJ Biopharma deal for felzartamab Greater China rights and other milestone payments.

The pending Apellis Pharmaceuticals acquisition represents a critical strategic move for Biogen's growth trajectory. Management expects the transaction to be accretive to earnings in 2027 and to materially increase the company's Non-GAAP diluted EPS compound annual growth rate through the end of the decade. The deal would add commercial medicines in immune-mediated retinal disease and nephrology, significantly strengthening Biogen's emerging nephrology franchise.

Investors should monitor several key developments in coming quarters. First, the closing of the Apellis acquisition in Q2 2026, which will trigger updated guidance inclusive of the combined entity. Second, continued LEQEMBI adoption metrics, particularly as the drug enters its maintenance dosing phase for early adopters. Third, progression of late-stage pipeline assets, especially litifilimab and felzartamab, which could provide additional growth drivers.

The company maintained its expectation for total revenue to decline by a mid-single digit percentage for full-year 2026 compared to 2025, as multiple sclerosis franchise erosion continues to offset growth product gains. With $4.7 billion in cash and equivalents against $6.3 billion in total debt, Biogen maintains financial flexibility to execute its transformation strategy while investing in both internal pipeline development and external business development opportunities.

StockCliff Research