Biogen's Profit Forecast Tops Estimates on Cost-Cutting Measures

Biogen Inc. released 2026 financial guidance, forecasting adjusted earnings between $15.25 and $16.25 per share. This range exceeds the average analyst estimate, signaling the impact of cost-cutting initiatives. Revenue is expected to decline by a mid-single-digit percentage, reflecting ongoing pressure on its multiple sclerosis (MS) franchise.

CEO Chris Viehbacher emphasized cost discipline as a key factor in the improved outlook. The company has reduced expenses through job cuts and streamlining its research pipeline. These efforts aim to counter the erosion of sales due to generic competition in MS treatments.

New drugs, including Alzheimer’s treatment Leqembi and rare disease therapies, are expected to partially offset the decline in MS sales. However, Viehbacher acknowledged that this transition will take time and is unlikely to reverse revenue declines in 2026.

Leqembi’s fourth-quarter sales reached $134 million, up from $121 million in the previous quarter. Despite this growth, the drug’s adoption remains constrained by bottlenecks in healthcare systems, including limited neurologist availability and infusion capacity.

The company is seeking FDA approval for a subcutaneous version of Leqembi, which could make the drug easier to use and differentiate it from competitors like Eli Lilly’s Kisunla. A decision on this application is expected on May 24, 2026.

Why Did This Happen?

Biogen’s cost-cutting measures have played a crucial role in improving its financial outlook. Over the past three years, Viehbacher has implemented significant operational restructuring, including reducing hundreds of jobs and trimming expenses. These actions have helped mitigate the impact of declining sales in its core MS business.

The company’s financial discipline is also evident in its R&D and SG&A expenses, which remained relatively stable in 2025. This stability is expected to continue in 2026, with no major increases in gross margin or combined R&D and SG&A costs.

The shift toward newer drugs is another factor driving Biogen’s improved earnings forecast. Growth products like Leqembi and Skyclarys are contributing to revenue despite the broader decline in MS sales. In 2025, revenue from these growth products increased by 19% year-over-year, helping offset declines in the MS segment.

What Are Analysts Watching Next?

Analysts are closely monitoring the performance of Biogen’s Alzheimer’s drug Leqembi, particularly its subcutaneous version, which is expected to improve patient access and convenience. The FDA’s decision on this version, scheduled for May 24, could significantly impact the drug’s adoption and its ability to compete with Eli Lilly’s Kisunla.

The company’s pipeline also includes litifilimab, which recently received FDA Breakthrough Therapy Designation for treating cutaneous lupus erythematosus (CLE). This designation could accelerate the drug’s development and regulatory approval, with phase 3 data expected in late 2026.

Investors are also watching Biogen’s broader pipeline, including potential data readouts from phase 2 and phase 3 trials across multiple therapeutic areas. These developments could provide additional growth opportunities and help restore long-term revenue momentum.

Despite the current revenue challenges, Biogen’s focus on innovation and strategic cost management has attracted positive attention from analysts. The company’s stock has outperformed the industry, with a 35.7% return over the past six months, and analysts remain cautiously optimistic about its long-term prospects.

What’s Next for Biogen?

Biogen faces the challenge of maintaining profitability while transitioning from its MS franchise to newer, high-potential therapies. The success of this transition will depend on the adoption of Leqembi and other growth products, as well as the regulatory and commercial progress of its pipeline.

The company’s ability to innovate and adapt to market changes will be crucial in sustaining its competitive edge. With a strong R&D portfolio and ongoing cost discipline, Biogen aims to position itself for long-term growth despite near-term headwinds.

Investors will be watching for further guidance on Biogen’s 2026 financial performance and the progress of its key clinical programs. The upcoming FDA decision on Leqembi’s subcutaneous version and the data readouts from litifilimab’s phase 3 trials are expected to be key catalysts in the coming months.