On a conference call Wednesday, Biogen CFO Paul Clancy said the company's 2016 revenue forecast of $11.1 billion to $11.3 billion assumes no price increases for its key multiple sclerosis drugs -- Tecfidera, Avonex, Tysabri and Plegridy.
Does this mean Biogen pledges to halt the longtime practice of regularly raising the price of its MS drugs? That would be a significant strategy shift and an acknowledgement that criticism of industry drug-pricing practices is having an impact on the company's business decisions.
Not so fast.
Biogen already raised the prices of its MS drugs earlier this month, in line with the company's long-standing practice. Obviously, those price hikes, most notably a reported 4% jump in the costs of Tecfidera and Avonex (Biogen's oldest MS drug), are already embedded in Biogen's revenue guidance for the year.
While its 2016 revenue forecast assumes no further price increases for MS drugs, Biogen didn't specifically rule out raising prices again this year. [Biogen often takes two price increases annually.]
On its Wednesday call, Biogen also dodged the question about whether or not planned increases in the price of its MS drugs were included or excluded from revenue guidance in the past. I looked back to last year and Biogen said nothing about drug price increases when giving revenue guidance.
A Biogen spokesman wouldn't elaborate or provide further details on the company's drug-pricing plans.
Biogen is acting a bit too cute by implying that it may not raise the price of its MS drugs again this year but refusing to say so specifically. As it stands now, the $11.1-$11.3 billion revenue guidance for 2016 represents 4% year-over-year growth -- not exactly robust although generally in-line with modest investor expectations.
Tecfidera U.S. sales in the fourth quarter were $785 million, better than expected although aided by $30 million in wholesaler inventory stocking. Biogen believes demand for Tecfidera is stabilizing in the U.S. but the company must still prove that its MS business can grow by increasing prescriptions and not just through price hikes.
Biogen shares were up 7% Wednesday because fourth-quarter earnings and 2016 financial guidance were good enough to assuage investor concerns about further deterioration in the company's MS franchise.
The next big stock-moving event for Biogen will come in the middle of the year with the expected results from a mid-stage study of the company's anti-LINGO drug in MS. With anti-LINGO, Biogen is trying to repair nerves damaged by MS, not just slow the progression of the disease. This has never been done before.
Adam Feuerstein writes regularly for TheStreet. In keeping with company editorial policy, he doesn't own or short individual stocks, although he owns stock in TheStreet. He also doesn't invest in hedge funds or other private investment partnerships. Feuerstein appreciates your feedback; click here to send him an email.