2018 Biotech Sector Watch On Earnings: AMGN, BIIB
Biotech Sector Watch on 2018 Earnings
Interest Rates at 3% Rising Too Fast?
Momentum Weakens For Industrials and Aerospace/Defense Stocks, DOW down 1.74%.
Stocks Sell-Off Despite Good Earnings, Healthcare (XLV) Down Only 0.75%, 2.18% YTD.
IBB down 1.45% yesterday and 5.6% YTD.
Biogen (BIIB) Rallies 1.1% to $262 Despite Flat Spinraza Sales
First Quarter Revenue rose 11.4% to $3.13B short of $3.1 B estimates.Net Income rose 58% to $1.17 B, $6.05 per share above analyst estimates of $5.94 per share. Spinraza sales for Q1, the first FDA approved product, spinal muscular atrophy were $364M short of analyst estimates of $381.55M. The Biogen CFO Jeffrey Capello said, “We believe that the International opportunity for Spinraza is even greater than in the U.S.” Sales of Tecfidera hit $987M for Q1 below estimates of $1.02B. Biogen (BIIB) is trading down 21.55% YTD and down 5.31% over 52 weeks and we suggested in late March that investors should look at the worse performing large-cap stocks (BIIB, CELG, REGN) as good buys for the long-term after earnings reports. On the positive side for Biogen are low forward PE of 10.03, Gross Margins of 86.7%, EPS Q/Q growth of 38.5% and a technical bottoming process at the $262 level over the past month.
Biogen sees big opportunities in neuroscience and brain diseases with a big bet in Alzheimer’s Disease programs, with their lead program aducanumab, despite recent setbacks. Here is their pipeline.
Amgen (AMGN) Down After Hours to $172 Level On 3% Sales Rise and EPS Beat
First Quarter Revenue rose 2% to $5.54B with Sales up 3% to $5.34B. First Quarter adjusted earnings were $3.47 per share up from $3.15 per share a year earlier helped by lower taxes and fewer shares outstanding. Guidance for the full year was raised slightly with an EPS of range $12.80 to $13.70. Sales of the anti-inflammatory drug Enbrel fell 6% to $1.05B because of more competition while sales of Repatha are than doubled to $223 M compared to an average annual estimate of $104M. The U.S launch of Aimovig (erenumab) a first-in-class migraine prevention therapy is expected in Q2. AMGN is down 2.9% YTD and up 5.39% over 12 months. AMGN remains a hold in our portfolio. Forward PE is 12.16, pays a dividend of 3.17%, gross margins of 82.2%, but shows weak Q/Q sales growth of 2.7%.
Several large-cap biotech companies will report later this week on 4/26 including ABBV, ALXN, BMY, and VRTX.