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Water Tower Research

Research from Water Tower Research

Water Tower Research is a leading equity research firm that provides research on micro, small and mid cap companies.

Water Tower Research was founded by Wall Street veterans after witnessing a fundamental shift in the investment research industry with the result being a declining knowledge base among investors, a lack of awareness and a shrinking pool of fundamental research being conducted on companies across the small-cap and micro-cap spectrum. The same issues are now increasingly occurring in the mid-cap space. This sea change within the investment community is impacting not only the companies themselves but also current shareholders and potential investors. With significantly less active sell-side sponsorship by Wall Street, a substantial information gap has developed between companies and various constituents in the financial community. The net result is fewer channels for insight and information to flow between companies and investors.

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<ul><li>Portfolio reshape mid-pivot—clean M&amp;A, messy pipeline. April and May arguably delivered the most significant portfolio reshape in Biogen’s recent history, accelerating the pivot from a declining MS franchise toward a diversified base spanning neurology, immunology, and rare disease.</li><li>In April, Biogen agreed to acquire TJ Biopharma’s Greater China rights to felzartamab, consolidating exclusive worldwide rights to the CD38-directed antibody in antibody-driven kidney disease.</li><li>May brought the close of the Apellis acquisition plus some clinical disappointments: CELIA Phase 2 results for diranersen (BIIB080), Biogen’s tau-targeting Alzheimer’s candidate; the failed Phase 2b LUMA readout for BIIB122, the Parkinson’s candidate partnered with Denali (NASDAQ: DNLI), which was subsequently discontinued; and the FDA review extension on the LEQEMBI IQLIK subcutaneous starting dose.</li></ul>

Portfolio reshape mid-pivot—clean M&amp;A, messy pipeline. April and May arguably delivered the most significant portfolio reshape in Biogen’s recent history, accelerating the pivot from a declining MS franchise toward a diversified base spanning neurology, immunology, and rare disease.In April, Biogen agreed to acquire TJ Biopharma’s Greater China rights to felzartamab, consolidating exclusive worldwide rights to the CD38-directed antibody in antibody-driven kidney disease.May brought the close of the Apellis acquisition plus some clinical disappointments: CELIA Phase 2 results for diranersen (BIIB080), Biogen’s tau-targeting Alzheimer’s candidate; the failed Phase 2b LUMA readout for BIIB122, the Parkinson’s candidate partnered with Denali (NASDAQ: DNLI), which was subsequently discontinued; and the FDA review extension on the LEQEMBI IQLIK subcutaneous starting dose.

BIIB: Reshaping Biogen; What the Latest Developments Tell Us About the 2027 Setup

<ul><li>2025 financial outperformance. Biogen ended 2025 with a strong quarter, with better-than-expected total revenue of $9.9 billion, up 2% Y/Y in reported and constant currency (CC) terms versus CC guidance of flat to increasing 1%.</li><li>2025 non-GAAP diluted EPS of $15.28 was above the guidance range of $14.50-15.00.</li><li>This outcome was despite the impact of 4Q25 IPR&amp;D charges of $222 million or $1.26/share compared with guidance of $1.25/share, reflecting the company’s aggressive growth in investment.</li></ul>

2025 financial outperformance. Biogen ended 2025 with a strong quarter, with better-than-expected total revenue of $9.9 billion, up 2% Y/Y in reported and constant currency (CC) terms versus CC guidance of flat to increasing 1%.2025 non-GAAP diluted EPS of $15.28 was above the guidance range of $14.50-15.00.This outcome was despite the impact of 4Q25 IPR&amp;D charges of $222 million or $1.26/share compared with guidance of $1.25/share, reflecting the company’s aggressive growth in investment.

BIIB: Strong 2026 EPS Guidance Surprise and a Catalyst-Rich Year Ahead

<ul><li>Growth outpacing attrition. For the first time, Biogen’s core products LEQEMBI® (Alzheimer’s), SKYCLARYS® (rare disease), and ZURZUVAE® (depression)—achieved sufficient scale to offset the erosion of its legacy multiple sclerosis (MS) franchise.</li><li>In 3Q25, these launch products delivered 67% Y/Y growth, leading Biogen to revise its 2025 revenue guidance from an expected mid-single-digit decline to flat at constant currency at the start of the year to increasing by 1.</li><li>Thus, after several years of decline, the company has stabilized revenue and has been upgrading guidance since the start of the year, marking a clear directional shift.</li></ul>

Growth outpacing attrition. For the first time, Biogen’s core products LEQEMBI® (Alzheimer’s), SKYCLARYS® (rare disease), and ZURZUVAE® (depression)—achieved sufficient scale to offset the erosion of its legacy multiple sclerosis (MS) franchise.In 3Q25, these launch products delivered 67% Y/Y growth, leading Biogen to revise its 2025 revenue guidance from an expected mid-single-digit decline to flat at constant currency at the start of the year to increasing by 1.Thus, after several years of decline, the company has stabilized revenue and has been upgrading guidance since the start of the year, marking a clear directional shift.

BIIB: Turning the Corner and Moving Beyond Multiple Sclerosis with More Momentum

Thematic (Sector/Industry)

<ul><li>Preannouncements were abundant as we approached this week’s major healthcare conference in SF.</li><li>As investors prepped for company updates and significant news flow, signs of M&amp;A activity were trickling in, with BIIB bidding for SAGE, LLY looking at Scorpion, and JNJ talking with ITCI.</li><li>Last week, Medicare confirmed coverage for LLY’s obesity drug, SANA had a successful hypoimmune transplant for T1D, and VIR’s dual- masked TCE kept up with JANX. </li></ul>

Preannouncements were abundant as we approached this week’s major healthcare conference in SF.As investors prepped for company updates and significant news flow, signs of M&amp;A activity were trickling in, with BIIB bidding for SAGE, LLY looking at Scorpion, and JNJ talking with ITCI.Last week, Medicare confirmed coverage for LLY’s obesity drug, SANA had a successful hypoimmune transplant for T1D, and VIR’s dual- masked TCE kept up with JANX. 

Biopharma Week in Review - January 13, 2025

<ul><li>We review last week’s biopharma news for meaningful clinical data, regulatory updates, research innovation, and M&amp;A.</li><li>Last week, SRRK gained from muscle-building data in SMA, with positive read-through for obesity and BHVN.</li><li>WW joined HIMS in selling NVO GLP-1 copies, while the FDA backed off on LLY copiers after a lawsuit.</li></ul>

We review last week’s biopharma news for meaningful clinical data, regulatory updates, research innovation, and M&amp;A.Last week, SRRK gained from muscle-building data in SMA, with positive read-through for obesity and BHVN.WW joined HIMS in selling NVO GLP-1 copies, while the FDA backed off on LLY copiers after a lawsuit.

Biopharma Week in Review - October 14, 2024

United States

Biogen Inc. develops, manufactures, and commercializes therapies, focusing on neurology, oncology, and immunology. The Company's products address diseases such as multiple sclerosis, non-Hodgkin's lymphoma, rheumatoid arthritis, Crohn's disease, and psoriasis.

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Biogen Inc (BIIB US)

BIIB: Reshaping Biogen; What the Latest Developments Tell Us About the 2027 Setup

Portfolio reshape mid-pivot—clean M&A, messy pipeline. April and May arguably delivered the most significant portfolio reshape in Biogen’s recent...

Water Tower Research

BIIB: Strong 2026 EPS Guidance Surprise and a Catalyst-Rich Year Ahead

Biogen ended 2025 with a strong quarter, with better-than-expected total revenue of $9.9 billion, up 2% Y/Y in reported and constant currency (CC)...

Water Tower Research

BIIB: Turning the Corner and Moving Beyond Multiple Sclerosis with More Momentum

Thus, after several years of decline, the company has stabilized revenue and has been upgrading guidance since the start of the year, marking a...

Water Tower Research

Biopharma Week in Review - January 13, 2025

As investors prepped for company updates and significant news flow, signs of M&A activity were trickling in, with BIIB bidding for SAGE, LLY...

Water Tower Research

Biopharma Week in Review - October 14, 2024

We review last week’s biopharma news for meaningful clinical data, regulatory updates, research innovation, and M&A. Last week, SRRK gained from...

Water Tower Research

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