Biogen Inc's quarterly profit blew past analysts' estimates, helped by higher-than-expected sales of its recently launched spinal muscular atrophy drug, Spinraza.
Spinraza's robust sales, which come amid concerns over slowing demand for Biogen's leading multiple sclerosis drug, Tecfidera, also pushed the company's shares up 5.4 percent in early trading on Tuesday.
Spinraza, a first-of-its-kind medicine for spinal muscular atrophy (SMT), was approved by the U.S. Food and Drug Administration in December. SMT is the leading genetic cause of death in infants.
The drug, priced at $125,000 per injection in the first year of use, generated sales of $47 million, handily beating the consensus estimate by $30 million.
"We believe well over 100 SMA patients are already on the drug, and our physician survey suggests the majority of patients appropriate for therapy will be on Spinraza by year-end," Cowen & Co analysts said.
Chief Financial Officer Paul Clancy said on a post-earnings conference call that he expected Spinraza adoption to ramp up and that at least 75 percent of all insurance plans now cover the treatment.
Spinraza is the first major drug launch under Chief Executive Officer Michel Vounatsos, who succeeded George Scangos in January.
The company is preparing for potential approvals in the EU, as well as in Japan and Canada this year, Vounatsos said on the call.
Biogen said it also expects to submit marketing applications in at least 10 additional countries in 2017.
Sales of Biogen's multiple sclerosis (MS) drug Tysabri came in at $545 million, also well ahead of the consensus estimate of $484 million, boosted by $45 million from an agreement with the Italian health regulator related to prior Tysabri sales.
However, sales of Biogen's MS bestseller, Tecfidera, came in at $958 million, below Street estimate of $989 million.
The company said it had maintained its global MS market share in the quarter, but added that the recent launch of Roche AG's Ocrevus had impacted sales.
However, Biogen will also benefit from Ocrevus sales, with Roche to pay the part-owner of the drug a royalty under a 2010 agreement.
Biogen's total revenue rose about 3 percent to $2.81 billion, ahead of analysts' average estimate of $2.73 billion, according to Thomson Reuters I/B/E/S.
Excluding items, Biogen earned $5.20 per share, eclipsing the average estimate of $4.97.
The strong Q1 performance puts the company on pace to meet or exceed its revenue 2017 guidance, Cowen analysts said.
The company's shares gave up some gains and were up 4.7 percent at $290.14.
(Reporting by Natalie Grover in Bengaluru; Editing by Sriraj Kalluvila)