Biogen Navigates Tariff Challenges, Sees Opportunities in Evolving Market Landscape

Biogen, a prominent player in the pharmaceutical industry, is grappling with the potential impact of tariffs while positioning itself for strategic partnerships in a shifting market environment. The company's first-quarter results and executive statements reveal a complex interplay of regulatory challenges, financial performance, and strategic planning.

Tariff Concerns and Supply Chain Preparedness

Biogen CEO Chris Viehbacher addressed the looming issue of tariffs during the company's first-quarter earnings call, acknowledging the unprecedented attention required to navigate this new challenge. Despite the uncertainty surrounding potential import taxes, Viehbacher expressed confidence in Biogen's ability to weather the storm, at least for the remainder of 2025.

The company's resilience stems from its unique position in the industry. Unlike many of its peers, Biogen generates a significant portion of its revenue—55% in 2024—from countries outside the United States. Additionally, 75% of its 2024 U.S. product sales came from domestically manufactured goods, potentially insulating the company from some tariff impacts.

Biogen's proactive approach to supply chain management has also played a crucial role. CFO Robin Kramer noted that the current guidance of $14.50 to $15.50 accounts for existing tariff impacts, including retaliatory measures from China. The company's supply chain team has built up inventory of products, active pharmaceutical ingredients, and materials to mitigate potential disruptions.

Market Dynamics and Strategic Opportunities

The pharmaceutical landscape is evolving rapidly, presenting both challenges and opportunities for companies like Biogen. Viehbacher noted a significant shift in the deal-making environment over the past four to six weeks, with companies facing low valuations and struggling to secure financing becoming more open to licensing or partnership agreements.

This change in market dynamics has created new opportunities for Biogen, which Viehbacher describes as a company with "biotech roots" that "knows how to do collaborations." The CEO emphasized the importance of patience and discipline in identifying suitable partners, positioning Biogen as a potential "trusted partner" in this evolving landscape.

One recent example of Biogen's strategic moves is its licensing deal with Stoke Therapeutics to develop an epilepsy antisense oligonucleotide. The agreement includes a $165 million upfront payment and could total $385 million, demonstrating Biogen's commitment to expanding its pipeline through strategic partnerships.

Alzheimer's Market and Competition

Biogen's Alzheimer's disease treatment Leqembi, developed in partnership with Eisai, continues to perform in line with analyst expectations. The drug contributed $96 million to Biogen's first-quarter revenue, including $52 million in U.S. sales, representing a 10% growth.

However, Leqembi now faces stiff competition from Eli Lilly's Kisunla (donanemab). Viehbacher downplayed concerns about a head-to-head battle, instead emphasizing the vast unmet need in the Alzheimer's market. He stated, "The most important thing for both Lilly, I think, and Biogen and Eisai, is that we start to really expand this market."

This perspective aligns with the broader industry goal of increasing access to disease-modifying treatments for Alzheimer's patients. Viehbacher noted that despite the availability of these new therapies, only a small fraction of patients who could benefit are currently receiving treatment.