Max Nisen is a Bloomberg Gadfly columnist covering biotech, pharma and health care. He previously wrote about management and corporate strategy for Quartz and Business Insider.

Whoever takes over Biogen from outgoing CEO George Scangos is inheriting a decidedly mixed bag. 

On the one hand, Biogen Inc. stock is outperforming its peers this year, and it jumped 3 percent on Wednesday after third-quarter earnings beat analyst expectations. On the other hand, the trajectory of its leading drug is uncertain, and its CEO search has no end in sight.

The net effect is a company in limbo.

Illusion of Growth
Biogen has outperformed its peers this year, but there's reason to worry about the fundamentals of its business

Biogen is all about multiple sclerosis. Its best-selling drug, Tecfidera, treats the disease. So do its three biggest drugs after that. Numbers 5 and 6? Hemophilia drugs the company plans to spin off. Trouble is, Biogen's MS franchise is stagnating, and the company lacks a solid Plan B. 

Tecfidera did beat sales expectations in the third quarter, but partly because of an inventory build-up by customers that may not repeat. Revenue for the drug outside the U.S. fell sequentially, and the overall U.S. commercial market for MS slowed down.

From Breakneck to Braking
After rapid initial uptake, sales growth of Biogen's lead MS drug has slowed
Source: Bloomberg

What growth there is in Tecfidera recently has often come from price hikes. That's a risky strategy in the current political environment and when alternatives to the drug exist. The arrival of a generic version of Teva's rival drug Copaxone is also a threat to Biogen's franchise, as are new medicines in development from Roche, Novartis, and Celgene.

Biogen's MS struggles might matter less if it had a robust pipeline. Outside of clinical trial success for a drug with billion-dollar sales potential called Nusinersen, for a rare muscle-wasting disease, Biogen has not covered itself in glory. A potential follow-up MS drug flopped in a Phase 2 trial, and Biogen isn't sure what to do with it next. Biogen announced on Wednesday it was giving up on a supposedly promising drug for inflammatory bowel disease and MS that it licensed just last year -- not a ringing endorsement of its deal-making acumen.

Biogen will get royalties from sales of Roche's promising MS drug Ocrevus, which could hit the market by year's end. But that will be slim comfort: Biogen passed on the chance to own a bigger piece of Ocrevus, and that drug may cannibalize sales of Biogen's own drugs. 

Biogen is unlikely to launch anything except for Nusinersen until 2018 or later, according to Bloomberg Intelligence, and most of what's on deck is quite risky. That includes the company's Alzheimer's drug candidate, which would be a blockbuster if approved, but which carries an extra-high failure risk.

Biogen's sales growth already looks glacial compared to its high-flying past. This quarter saw 6.4 percent revenue growth, the lowest since 2012. Growth might slow even further as Biogen hives off the hemophilia business and its MS franchise continues to languish. 

Falling Off
Slowing sales of Biogen's multiple sclerosis drugs mean the company's once rapid revenue growth has hit a wall
Source: Bloomberg

A lame-duck CEO is not about to fix that. Until someone new takes the reins -- whenever that might be -- Biogen's story will likely continue to be one of sluggish growth and crossed fingers. 

This column does not necessarily reflect the opinion of Bloomberg LP and its owners.

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Max Nisen in New York at

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