BIIB Q1 Earnings Call: New Product Growth Outpaces Declining MS Franchise Amid Lowered Guidance

Biotech company Biogen (NASDAQ: BIIB) beat Wall Street’s revenue expectations in Q1 CY2025, with sales up 6.1% year on year to $2.43 billion. Its non-GAAP profit of $3.02 per share was 1.9% above analysts’ consensus estimates.

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StockStory’s Take

Biogen’s first quarter results for 2025 were shaped by continued growth in its newer products, notably LEQEMBI, SKYCLARYS, and ZURZUVAE, which now constitute a significant portion of total revenue. Management emphasized the emergence of a diversified portfolio, with CEO Chris Viehbacher highlighting the importance of recent product launches and international expansion, particularly the approval of LEQEMBI in Europe and SKYCLARYS in new markets. Viehbacher noted, “We have a commercial portfolio that’s now gotten to be about 45% of our product revenue, and those products mostly have a very long runway to continue to grow.”

Looking ahead, Biogen’s guidance reflects caution due to persistent headwinds in its legacy multiple sclerosis (MS) business. CFO Robin Kramer explained that the decline in MS revenue is expected to outpace the growth from new product launches, leading to a mid-single-digit revenue decline for the year. Kramer stated, “We expect that our launch products will generate sequential revenue growth, but we expect the absolute MS revenue decline to be steeper than this growth in 2025.” Management also cited uncertainties around tariffs and generic competition, resulting in a reduced full-year adjusted EPS outlook.

Key Insights from Management’s Remarks

Biogen’s management attributed first quarter performance to strong sales momentum in its new product launches and ongoing challenges in its legacy MS segment. The company’s evolving portfolio and pipeline progress were central themes.

• New product launches gaining traction: LEQEMBI, SKYCLARYS, and ZURZUVAE together accounted for approximately 45% of product revenue, supported by international launches, expanded indications, and broader physician adoption. Management highlighted the LEQEMBI European approval as a milestone, positioning the drug as the first disease-modifying treatment for Alzheimer’s to secure global regulatory recognition.

• Pipeline maturation and diversification: Biogen initiated five Phase 3 clinical trials this year, notably advancing felzartamab in several immunology indications. The pipeline now spans both neurology and immunology, reducing historical dependence on a single therapeutic area.

• Operational changes in commercialization: The company adapted its LEQEMBI launch strategy, including direct patient engagement and a focus on simplifying physician workload through innovations like subcutaneous formulations for at-home use, aiming to address barriers to broader adoption.

• Challenges in the MS franchise: The MS business continued to face revenue declines due to biosimilar and generic competition, particularly for TYSABRI and TECFIDERA. Management expects these pressures to intensify, especially with a potential TYSABRI biosimilar entering the U.S. market later in the year.

• Tariff and supply chain considerations: Management said Biogen’s supply chain structure largely shields it from near-term tariff impacts, with most U.S. revenue generated from domestically manufactured products and a diversified international revenue base. However, ongoing monitoring is needed given the evolving trade environment.

Drivers of Future Performance

Management expects Biogen’s financial trajectory to hinge on balancing the growth of new products and pipeline advances against persistent MS declines and external risks. The company’s guidance was shaped by these contrasting forces.

• New product revenue expansion: Launch products—especially LEQEMBI, SKYCLARYS, and ZURZUVAE—are expected to deliver sequential growth, aided by geographic expansion, new formulations, and broader physician adoption, particularly as regulatory approvals continue worldwide.

• MS headwinds and generic competition: The MS franchise is projected to decline at an accelerated rate due to ongoing biosimilar and generic entries, with the anticipated U.S. launch of a TYSABRI biosimilar and expanded TECFIDERA generics in Europe weighing on overall growth and margins.

• Pipeline development and regulatory outcomes: Progress in late-stage trials, including multiple Phase 3 initiations and upcoming data readouts, will be crucial for long-term revenue replacement and diversification beyond MS and rare disease segments. Regulatory approvals and adoption of new delivery technologies, such as subcutaneous LEQEMBI, are also key variables.

Top Analyst Questions

• Brian Abrahams (RBC Capital Markets): Asked about the LEQEMBI rollout strategy in Europe and expected reimbursement challenges. Management replied that launches will proceed market by market and noted that approval by all major regulators may aid reimbursement processes but will require time.
• Evan Seigerman (BMO Capital Markets): Inquired how subcutaneous LEQEMBI could accelerate U.S. sales. CEO Chris Viehbacher explained it should improve patient access and physician workload by enabling at-home administration, especially for older or rural patients.
• Salveen Richter (Goldman Sachs): Sought views on LEQEMBI’s growth prospects with subcutaneous dosing and new diagnostics. Management indicated that blood-based diagnostics could enable earlier diagnosis and treatment, potentially expanding the eligible patient pool.
• Chris Schott (JPMorgan): Asked about Biogen’s business development strategy amid volatile markets. Viehbacher said market conditions might create more acquisition or partnership opportunities, but the company remains disciplined in pursuing external innovation.
• Geoff Meacham (Citibank): Questioned whether Biogen’s manufacturing capacity could support third-party partnerships. Management responded that its U.S. and European facilities already serve both internal and contract manufacturing needs and are open to additional opportunities if excess capacity arises.

Catalysts in Upcoming Quarters

In the coming quarters, the StockStory team will be watching (1) the commercial uptake of LEQEMBI in both the U.S. and Europe as new formulations become available, (2) the impact of biosimilar and generic competition on the MS franchise, and (3) progress in Biogen’s late-stage clinical pipeline, particularly the advancement of felzartamab and zorevunersen. Regulatory decisions and the pace of reimbursement approvals will also be important signposts for future growth.

Biogen currently trades at a forward P/E ratio of 7.5×. In the wake of earnings, is it a buy or sell? The answer lies in our free research report.

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