Executive Summary
Biogen reported 2.2% revenue growth to $9.9 billion driven by new product launches (SKYCLARYS, QALSODY, ZURZUVAE), but faces declining MS franchise (-7.1%) due to generic and biosimilar competition. Operating margin compressed as expense growth (+7.3%) outpaced revenue growth, resulting in a 21.4% decline in diluted EPS.
What happened
Biogen reported total revenue of $9.9 billion for fiscal 2025, an increase of 2.2% compared to $9.7 billion in 2024. Product revenue declined 1.3% to $7.1 billion, as the MS franchise contracted 7.1% to $4.0 billion due to generic competition for TECFIDERA (revenue down 29.7% to $679.7 million) and biosimilar competition for TYSABRI (down 2.9% to $1.7 billion). This decline was partially offset by rare disease revenue growth of 8.4% to $2.2 billion, driven by new product launches: SKYCLARYS revenue increased 36.1% to $520.5 million, QALSODY revenue surged 168.2% to $86.9 million, and ZURZUVAE revenue grew 170.2% to $195.1 million. Revenue from anti-CD20 therapeutic programs increased 6.3% to $1.9 billion, primarily reflecting higher OCREVUS royalty revenue of $1.4 billion (up from $1.3 billion). Alzheimer's collaboration revenue from LEQEMBI increased to $177.7 million from $59.9 million, driven by continued U.S. and international launch activity. Total cost and expense increased 7.3% to $8.3 billion, driven by $471.8 million in acquired IPR&D, upfront and milestone expense (compared to $61.5 million in 2024), primarily related to the Stoke collaboration ($165.0 million upfront), Alcyone acquisition ($85.0 million), Vanqua license ($70.0 million), and Dayra collaboration ($50.0 million). R&D expense decreased 10.2% to $1.8 billion due to cost reduction measures realized in connection with the Fit for Growth program and $200.0 million in R&D funding received from Royalty Pharma for litifilimab development. SG&A expense increased 1.2% to $2.4 billion, reflecting higher operational spending on sales and marketing for LEQEMBI and SKYCLARYS launches. The IRA Medicare Part D redesign had a modest net unfavorable impact of approximately $90.0 million to 2025 revenue. Diluted earnings per share decreased 21.4%, reflecting the impact of higher upfront and milestone payments and margin compression.
Why it matters for investors
Biogen's business is undergoing a structural shift as its legacy MS franchise faces accelerating competitive pressure from generics and biosimilars, while its growth profile increasingly depends on the commercial execution of newly launched rare disease and Alzheimer's assets. The 7.1% decline in MS revenue, concentrated in TECFIDERA and TYSABRI, highlights the erosion of the company's historically high-margin products. However, the 8.4% growth in rare disease revenue demonstrates that new product launches are beginning to offset this decline. SKYCLARYS, QALSODY, and ZURZUVAE collectively contributed meaningful incremental revenue, and LEQEMBI collaboration revenue nearly tripled, indicating improving momentum in the Alzheimer's market. The company's expense base increased at a faster rate than revenue, driven by significant upfront and milestone payments totaling $471.8 million, reflecting Biogen's strategic pivot toward external business development to replenish its pipeline. The 10.2% reduction in R&D expense, aided by the Fit for Growth program and external funding from Royalty Pharma, suggests management is balancing cost discipline with targeted investment in high-priority programs such as litifilimab and felzartamab. The IRA Medicare Part D redesign created a modest revenue headwind of approximately $90.0 million, and the full extent of IRA impacts remains uncertain pending further regulatory guidance. Operating cash flow declined 23.3% to $2.2 billion, primarily due to higher worldwide tax payments of approximately $864.0 million driven by timing of estimated payments. However, the company's cash position improved significantly, with cash, cash equivalents, and marketable securities totaling $4.2 billion as of year-end, up from $2.4 billion, providing substantial liquidity to fund pipeline development and business development activities. The net result is a company navigating a transition period with declining profitability in mature products, increasing investment in new launches and pipeline development, and uncertainty surrounding pricing and reimbursement policy.
Bullish points
Rare disease revenue grew 8.4% to $2.2 billion, driven by SKYCLARYS revenue increasing 36.1% to $520.5 million and QALSODY revenue surging 168.2% to $86.9 million, demonstrating successful execution of new product launches in high-value rare disease markets.
ZURZUVAE revenue grew 170.2% to $195.1 million, reflecting strong uptake in the U.S. market for postpartum depression, with management anticipating continued patient growth in 2026.
Alzheimer's collaboration revenue from LEQEMBI increased 196.7% to $177.7 million, driven by higher sales volumes from continued U.S. and international launch activity, with regulatory approvals expanding globally (EC, Canada, Australia, China, and Japan).
Cash, cash equivalents, and marketable securities totaled $4.2 billion as of December 31, 2025, an increase of 78.8% from $2.4 billion, providing substantial liquidity to fund pipeline development, business development activities, and potential share repurchases under the remaining $2.1 billion authorization.
R&D expense decreased 10.2% to $1.8 billion due to cost reduction measures realized in connection with the Fit for Growth program, which generated approximately $1.0 billion in gross operating expense savings by the end of 2025, demonstrating disciplined expense management while advancing late-stage programs including felzartamab and litifilimab.
Bearish points
MS revenue declined 7.1% to $4.0 billion, driven by global TECFIDERA revenue decreasing 29.7% to $679.7 million due to multiple generic entrants and TYSABRI revenue decreasing 2.9% to $1.7 billion due to biosimilar competition, with management expecting the MS business to continue declining in 2026.
Diluted earnings per share decreased 21.4%, reflecting margin compression as total cost and expense increased 7.3% while revenue grew only 2.2%, driven by $471.8 million in acquired IPR&D, upfront and milestone expense and higher SG&A spending on product launches.
Operating cash flow declined 23.3% to $2.2 billion from $2.9 billion in 2024, primarily due to higher worldwide tax payments of approximately $864.0 million driven by timing of estimated tax payments and higher acquired IPR&D, upfront and milestone payments.
The IRA Medicare Part D redesign had a modest net unfavorable impact of approximately $90.0 million to 2025 revenue, concentrated in SKYCLARYS and the MS portfolio, with the full extent of IRA impacts remaining uncertain pending further regulatory guidance and potential additional legislation such as the MFN executive order.
Product revenue declined 1.3% to $7.1 billion, as rare disease growth was insufficient to fully offset the erosion of the MS franchise, indicating Biogen's portfolio transition remains incomplete and vulnerable to competitive and pricing pressures.
Key highlights
Biogen reported total revenue of $9.9 billion for fiscal 2025, an increase of 2.2% compared to fiscal 2024, driven by rare disease revenue growth of 8.4% to $2.2 billion and Alzheimer's collaboration revenue from LEQEMBI increasing 196.7% to $177.7 million, partially offset by MS revenue declining 7.1% to $4.0 billion due to generic TECFIDERA and biosimilar TYSABRI competition. SKYCLARYS revenue increased 36.1% to $520.5 million, QALSODY revenue surged 168.2% to $86.9 million, and ZURZUVAE revenue grew 170.2% to $195.1 million, reflecting successful new product launches. Total cost and expense increased 7.3% to $8.3 billion, driven by $471.8 million in acquired IPR&D, upfront and milestone payments, including $165.0 million to Stoke, $85.0 million for Alcyone acquisition, and $70.0 million to Vanqua, partially offset by a 10.2% decline in R&D expense driven by cost reduction measures and $200.0 million in R&D funding received from Royalty Pharma for litifilimab development. The IRA Medicare Part D redesign had a modest net unfavorable impact of approximately $90.0 million to 2025 revenue. Diluted earnings per share decreased 21.4%, reflecting margin compression as expense growth outpaced revenue gains. Operating cash flow declined 23.3% to $2.2 billion, primarily due to higher worldwide tax payments of approximately $864.0 million driven by timing of estimated payments. Cash, cash equivalents, and marketable securities totaled $4.2 billion as of December 31, 2025, an increase of 78.8% from $2.4 billion. In February 2025, Biogen entered into a collaboration with Stoke for zorevunersen for Dravet syndrome ($165.0 million upfront), in May 2025 Biogen issued $1.75 billion in 2025 Senior Notes and used the proceeds to redeem the 4.050% Senior Notes due September 15, 2025, and in November 2025 Biogen completed the acquisition of Alcyone Therapeutics for $85.0 million. LEQEMBI received regulatory approvals in multiple markets including the EC, Canada, Australia, China, and Japan, and the FDA approved subcutaneous autoinjector formulations for weekly maintenance dosing and is reviewing weekly starting dose with a PDUFA date of May 24, 2026. Management anticipates MS revenue will continue to decline in 2026 due to increasing competition, rare disease revenue growth driven by SKYCLARYS, QALSODY, and anticipated flat SPINRAZA revenue, and SG&A expense to be relatively flat as product launch spending is offset by reduced spending on mature products.
Management commentary
Management indicated that revenue growth will depend upon successful clinical development, regulatory approval, and launch of new commercial products as well as additional indications for existing products. The company expects MS revenue to continue declining in 2026 as a result of increasing competition for many MS products in both U.S. and rest of world markets, with TECFIDERA revenue expected to be adversely impacted by accelerating generic competition in certain E.U. markets and TYSABRI sales expected to continue to be adversely affected by biosimilar competition worldwide. Management expects growth in rare disease revenue in 2026 due to continued launch of SKYCLARYS in the U.S., Europe, and other international markets, continued launch of QALSODY in Europe, and anticipates global SPINRAZA revenue growth to be relatively flat. Management expects core R&D expense to increase slightly in 2026 with most investments in late-stage programs and anticipates SG&A expense to be relatively flat compared to 2025, with increases in spend related to product launches and pre-launch activities offset by reduced spending within mature products. Management noted the IRA's drug pricing controls and Medicare Part D redesign had an adverse impact on sales, particularly for products more substantially reliant on Medicare reimbursement, with a modest net unfavorable impact of approximately $90.0 million to 2025 revenue concentrated in SKYCLARYS and the MS portfolio. Management stated that if the company is unable to fully utilize its manufacturing facilities, additional excess capacity charges may occur, which would have a negative effect on financial condition and results of operations. Management highlighted that the Fit for Growth program generated approximately $1.0 billion in gross operating expense savings by the end of 2025, some of which has been reinvested in various initiatives. Management noted that as of the date of the filing, the company does not expect tariffs currently applicable to its business to result in a material adverse effect on operations in 2026, based on existing or previously announced tariffs, manufacturing footprint, and inventory positioning, though significant additional tariffs could impact the business in the future. Management stated it believes existing funds, when combined with cash generated from operations and access to additional financing resources, are sufficient to satisfy operating, working capital, strategic alliance, milestone payment, capital expenditure, and debt service requirements for the foreseeable future.
What to watch next
Investors should monitor:
MS revenue trajectory in 2026, particularly the pace of TECFIDERA generic erosion in Europe and TYSABRI biosimilar penetration globally, to assess the sustainability of the legacy franchise and timeline for when rare disease and Alzheimer's revenue can fully offset MS declines.
LEQEMBI commercial momentum in the U.S. and international markets, including the outcome of the May 24, 2026 PDUFA action date for the subcutaneous autoinjector weekly starting dose and uptake of the monthly IV maintenance dosing regimen, to evaluate Biogen's ability to scale Alzheimer's collaboration revenue beyond the $177.7 million achieved in 2025.
SKYCLARYS and QALSODY launch execution and revenue growth trajectory in 2026, along with the outcome of the supplemental NDA resubmission for the higher dose regimen of SPINRAZA with a PDUFA action date of April 3, 2026, to assess the durability of rare disease revenue expansion.
The impact of the IRA Medicare Part D redesign and potential additional drug pricing reforms such as the MFN executive order on 2026 revenue and margins, along with the implementation timeline and financial impact of the OBBBA provisions with effective dates in 2027 and 2028, to gauge regulatory and reimbursement headwinds.
Progress of late-stage pipeline programs including felzartamab Phase 3 trials in AMR, IgAN, and PMN, litifilimab Phase 3 trial in CLE and SLE (with $200.0 million Royalty Pharma funding support), and salanersen Phase 3 trial initiation expected in 2026, to evaluate the company's ability to sustain long-term growth beyond current marketed products.
This summary is based solely on excerpts from the company's Form 10-K filing.
