Strong sales of Biogen Inc.'s pricey spinal muscular atrophy drug, Spinraza (nusinersen), helped the company cruise past consensus estimates and hit record second-quarter sales on Tuesday. The company also committed to strengthening its multiple sclerosis (MS) business while exploring new deals "of all sizes" to build out its neurology-focused pipeline. Shares (NASDAQ:BIIB) lost $1.74 to $282.96 on Tuesday.

Spinraza, the first drug indicated for spinal muscular atrophy, or SMA, gained FDA approval in December 2016 and is also approved in Europe, Japan and Canada.

Sales of the therapy, which cost $750,000 for the first year of treatment, grew to $203 million during the second quarter, from $47 million during the first quarter. That performance blew past consensus estimates of $70 million, generating significant buzz among analysts about its future. (See BioWorld Today, Dec. 28, 2016.)

Despite that performance, Biogen CEO Michel Vounatsos sought to temper expectations, noting "we believe that up to 60 percent of the type 2 SMA population has already undergone some type of spinal surgery, creating challenges in intrathecal administration.

"As leading physicians have transitioned to some of these more challenging cases," he said, "we expect slower uptake in type 2 patients through the balance of the year."

Cowen & Co. analyst Eric Schmidt wrote that "we've heard this story before," and that the "cautious commentary is reminiscent of management's warnings regarding the logistical hurdles at the outset of Spinraza's launch."

Non-GAAP earnings per share hit $5.04, blowing past consensus estimates of $4.41 per share, according to Thomson Reuters I/B/E/S estimates.

Sales of the company's leading MS drug, Tecfidera (dimethyl fumarate), rose to $1.1 billion during the quarter vs. $987 million in the second quarter of 2016, benefiting from seasonal recovery in both unit volumes and discounts and allowances, the company said.

Second-quarter sales of Tysabri (natalizumab) were stable at $496 million vs. $497.4 million in the second quarter of 2016.

Biogen also saw progress in its biosimilars business, which delivered revenues of $91 million. The company recently received a positive CHMP opinion in Europe for its adalimumab biosimilar, Imraldi, which if approved would make Biogen the first company to offer access to biosimilars of the three major anti-tumor necrosis factor therapies in Europe. With a 2018 deadline for opting to expand its investment in Samsung Bioepis, its joint venture with Samsung Biologics, fast approaching, Vounatsos said Biogen currently expects to exercise that option. (See BioWorld Today, Feb. 21, 2017.)

"Biosimilars are an important contributor to our growth while not being at the core of our neuroscience focus. Our plan is to use any positive cash flow from our commercial operation in the JV to reinvest in our core growth strategy," he said.

Total second-quarter revenue at the Cambridge, Mass.-based company rose to $3.1 billion, a 6 percent increase vs. the prior year and a 15 percent increase excluding hemophilia revenues, following the first-quarter spinout of that business into new company Bioverativ Inc. (See BioWorld Today, Feb. 1, 2017.)

Second-quarter net income fell to $863 million vs. $1.05 billion during the second quarter of 2016 due to higher costs, including those tied to the set-up and spin-off of Bioverativ and the costs of winding down its Cambridge manufacturing facility. Diluted earnings per share were $4.07 vs. $4.79 per share a year earlier.

Though its sales rose in the second quarter, Tecfidera also took a toll on the company's outlook. Full-year guidance was updated to forecast GAAP diluted earnings per share of between $17.05 and $17.65 vs. prior guidance of $18 and $18.80 to account for, in part, a pre-tax impairment charge recognized in the first quarter related to a settlement and license agreement with Forward Pharma A/S for intellectual property related to the MS drug.

Biogen's late May acquisition of Remedy Pharmaceuticals Inc.'s phase III-ready stroke asset, Cirara (intravenous glibenclamide), now known as BIIB-093, also took a chunk out of the company's projected full-year outlook, with a $120 million GAAP-only pre-tax charge against earnings taken to cover the deal's up-front fee. (See BioWorld Today, Jan. 18, 2017.)

Full-year R&D expenses at the company are expected to hit about 18 percent of revenue, an increase from prior guidance the company attributed mostly to the $360 million it recently spent to license Bristol-Myers Squibb Co.'s BIIB-092 (formerly known as BMS-986168), a phase II anti-tau antibody with potential in Alzheimer's disease and progressive supranuclear palsy.