Investors battered drug maker Biogen on Friday, sending its stock down 22 percent after the biotechnology company lowered its financial forecast on disappointing sales of its best-selling drug Tecfidera.
Rolled out as a potential blockbuster two years ago, Tecfidera is the company’s newest drug to be manufactured in the Triangle. Tecfidera is made at a Durham facility approved last month by the Food and Drug Administration to produce the multiple sclerosis treatment.
Cambridge, Mass.-based Biogen employs 1,300 people in Morrisville and Durham and plans to add 100 more this quarter.
Biogen’s stock fell $85.02 to close at $300.03 after the company cut its 2015 revenue growth projections by half, to a range of 6 percent to 8 percent.
“We’re very disappointed in the change of outlook for the year,” Chief Financial Officer Paul Clancy told analysts.
But Biogen executives said their strategy remains unchanged. They aim to establish Tecfidera, which was approved in the U.S. two years ago, as the world’s pre-eminent MS drug.
Wall Street analysts were not alarmed by the day’s events, some attributing the stock sell-off to a case of unrealistic expectations among investors. Analyst Karen Andersen of Morningstar said the market overreacted, while Barclay’s analyst Geoff Meacham wrote, “After almost 15 years, Biogen’s competitive position in the MS market doesn’t unwind in a single quarter.”
Still, the lowered financial forecast for the rest of the year caught some off guard. “The magnitude of the reduction is surprising since it implies flat or even shrinking Tec[fidera] sales,” wrote analyst Joseph Schwartz of Leerink Partners.
Tecfidera accounted for $883 million in revenue in the second quarter, up from $825 million in the first quarter and $700 million during the same period in 2014. But for the second quarter in a row Tecfidera sales were below analysts’ expectations, along with other MS drugs the company makes.
Biogen executives and analysts attributed the slowdown in Tecfidera sales to several factors, including lower demand in this country, lower prices negotiated in Germany, as well as two patients on the drug getting sick. One of those patients died last year in what Biogen characterizes as a “safety event” that’s causing doctors and patients to be more cautious about taking the drug.
Tecfidera can have the effect of suppressing the immune system, which can cause some patients to develop opportunistic infections. A European patient died of pneumonia last year after taking Tecfidera for more than 4 years as part of as safety study.
Another potential factor in the lower forecast is the recent launch by Novartis and Momenta of a generic drug that is seen by some as a potential competitor to Tecfidera, some analysts speculated.
Biogen, which also makes medicines to treat hemophilia, said Friday its second-quarter sales grew 7 percent to $2.6 billion, while net income increased 20 percent to $995 million for the three-month period ending June 30.
The company’s Durham site will increase to 200 workers this quarter after Biogen completes its acquisition of the site from Japanese drug maker Esai.
Biogen bills itself as North Carolina’s largest biotech company, a subset of drug makers that create products from living cell tissue and other biologics.
Biogen has 7,500 employees worldwide and 13 medications under development.