Dallas, Texas 07/27/2015 (Financialstrend) – Biogen Inc (NASDAQ:BIIB) shed more than $20 billion in market value after it disclosed it was facing sales growth challenges for its lead drug for multiple sclerosis. The biotechnology company has since slashed its full-year outlook on concerns that sales momentum will continue dropping. The company expects its revenue to grow by between 6% and 8% down from an initial guidance of between 14% and 16%.
Sales Growth Concerns
CEO, George Scangos, has already acknowledged that they have a lot to do if they are to reinvigorate sales and prevent any further downturn. Biogen Inc (NASDAQ:BIIB) will have to devise a clear cut strategy for triggering sales for Tecfidera, which is by far the company’s biggest product by revenue. The drug has continued to register fewer new patients in part because of concerns about a rare side effect associated with the drug.
Sales have also been affected by lower reimbursement prices in Germany as well many patients discontinuing its usage. The chief finance officer has already indicated that they expect limited patient growth, heading into year end. Despite the change in fortunes in the quarter, Biogen Inc (NASDAQ:BIIB) registered a 7% growth in revenue that came in at $2.59 billion, but below analysts’ forecasts of $2.71 billion.
Biogen Inc (NASDAQ:BIIB) profit was up to $927.3 million or $3.93 a share, up from $714.5 million posted a year ago. Sales for Tecfidera rose to a high of $883.3 million from $700.4 million posted a year earlier but still less than the $941.2 million that analysts had projected.
Biogen Inc (NASDAQ:BIIB) is facing stiff competition from Novartis AG (ADR) (NYSE:NVS) AG whose drug Gilenya is also competing for market share having registered a 16% sales increase to $700 million in the quarter. The company is now under pressure more than ever to use its balance sheet to take on debt for acquisitions as well as buying back shares in a bid of addressing the lack of new products in the pipeline.