Analysis of Solvency Ratios
Solvency ratios also known as long-term debt ratios measure a company ability to meet long-term obligations.
Solvency Ratios (Summary)
Biogen Inc., solvency ratios
Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).
The solvency profile of the organization exhibits a distinct transition between two periods: a phase of stability and improving coverage from 2017 to 2019, followed by an increase in leverage and a decline in coverage capacity between 2020 and 2021.
- Capital Structure and Leverage Ratios
- From 2017 to 2019, debt-to-equity, debt-to-capital, and debt-to-assets ratios remained relatively stable or showed slight declines, suggesting a conservative approach to financing. However, a significant upward shift occurred in 2020, with the debt-to-equity ratio rising from 0.45 to 0.69 and the debt-to-assets ratio increasing from 0.22 to 0.30. These levels remained largely consistent into 2021, indicating a permanent shift toward a higher debt load relative to the company's equity and asset base.
- Financial Leverage
- A consistent upward trend in financial leverage is observed from 2017 through 2020, increasing from 1.88 to a peak of 2.30. A slight correction occurred in 2021, where the ratio moderated to 2.19, though it remained significantly higher than the baseline established at the beginning of the five-year period.
- Coverage Ratios
- Interest and fixed charge coverage ratios demonstrated strong growth through 2019, with interest coverage peaking at 38.60. This indicates a period of high efficiency in servicing debt obligations. Conversely, a sharp deterioration is observed starting in 2020, culminating in a substantial drop in 2021, where interest coverage fell to 8.02 and fixed charge coverage declined to 6.04. This downward trajectory suggests a reduced margin of safety for meeting fixed financial obligations.
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Debt Ratios
Coverage Ratios
Debt to Equity
Biogen Inc., debt to equity calculation, comparison to benchmarks
| Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||
| Current portion of notes payable | 999,100) | —) | 1,495,800) | —) | 3,200) | |
| Notes payable, excluding current portion | 6,274,000) | 7,426,200) | 4,459,000) | 5,936,500) | 5,935,000) | |
| Total debt | 7,273,100) | 7,426,200) | 5,954,800) | 5,936,500) | 5,938,200) | |
| Total Biogen Inc. shareholders’ equity | 10,896,200) | 10,700,300) | 13,343,200) | 13,039,600) | 12,612,800) | |
| Solvency Ratio | ||||||
| Debt to equity1 | 0.67 | 0.69 | 0.45 | 0.46 | 0.47 | |
| Benchmarks | ||||||
| Debt to Equity, Competitors2 | ||||||
| AbbVie Inc. | 4.98 | — | — | — | — | |
| Amgen Inc. | 4.97 | — | — | — | — | |
| Bristol-Myers Squibb Co. | 1.24 | — | — | — | — | |
| Danaher Corp. | 0.49 | — | — | — | — | |
| Eli Lilly & Co. | 1.88 | — | — | — | — | |
| Gilead Sciences Inc. | 1.27 | — | — | — | — | |
| Johnson & Johnson | 0.46 | — | — | — | — | |
| Merck & Co. Inc. | 0.87 | — | — | — | — | |
| Pfizer Inc. | 0.50 | — | — | — | — | |
| Regeneron Pharmaceuticals Inc. | 0.14 | — | — | — | — | |
| Thermo Fisher Scientific Inc. | 0.85 | — | — | — | — | |
| Vertex Pharmaceuticals Inc. | 0.06 | — | — | — | — | |
| Debt to Equity, Sector | ||||||
| Pharmaceuticals, Biotechnology & Life Sciences | 0.93 | — | — | — | — | |
| Debt to Equity, Industry | ||||||
| Health Care | 0.80 | — | — | — | — | |
Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).
1 2021 Calculation
Debt to equity = Total debt ÷ Total Biogen Inc. shareholders’ equity
= 7,273,100 ÷ 10,896,200 = 0.67
2 Click competitor name to see calculations.
The solvency profile reflects a period of stability from 2017 through 2019, followed by a notable shift in capital structure beginning in 2020. The leverage position experienced a significant increase in 2020, driven by a simultaneous rise in total debt and a contraction in total shareholders' equity.
- Total Debt Trends
- Total debt remained relatively constant between 2017 and 2019, fluctuating minimally around the US$ 5.9 billion mark. A substantial increase occurred in 2020, with debt rising to US$ 7.43 billion, before experiencing a marginal decline to US$ 7.27 billion in 2021.
- Shareholders' Equity Trends
- Equity demonstrated a gradual upward trajectory from 2017 to 2019, peaking at US$ 13.34 billion. This trend reversed sharply in 2020, with equity falling to US$ 10.70 billion, representing a significant reduction in the net asset base. A slight recovery was noted in 2021, with equity rising to US$ 10.90 billion.
- Debt to Equity Ratio Analysis
- The debt to equity ratio exhibited a slight downward trend from 0.47 in 2017 to 0.45 in 2019, indicating a strengthening solvency position during this interval. A sharp increase to 0.69 was recorded in 2020, resulting from the compounded effect of increased borrowing and decreased equity. The ratio moderated slightly to 0.67 by the end of 2021, although it remained elevated relative to the 2017-2019 baseline.
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Debt to Equity (including Operating Lease Liability)
Biogen Inc., debt to equity (including operating lease liability) calculation, comparison to benchmarks
| Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||
| Current portion of notes payable | 999,100) | —) | 1,495,800) | —) | 3,200) | |
| Notes payable, excluding current portion | 6,274,000) | 7,426,200) | 4,459,000) | 5,936,500) | 5,935,000) | |
| Total debt | 7,273,100) | 7,426,200) | 5,954,800) | 5,936,500) | 5,938,200) | |
| Current operating lease liabilities (included in Accrued expenses and other) | 89,100) | 83,200) | 73,600) | —) | —) | |
| Long-term operating lease liabilities | 330,400) | 402,000) | 412,700) | —) | —) | |
| Total debt (including operating lease liability) | 7,692,600) | 7,911,400) | 6,441,100) | 5,936,500) | 5,938,200) | |
| Total Biogen Inc. shareholders’ equity | 10,896,200) | 10,700,300) | 13,343,200) | 13,039,600) | 12,612,800) | |
| Solvency Ratio | ||||||
| Debt to equity (including operating lease liability)1 | 0.71 | 0.74 | 0.48 | 0.46 | 0.47 | |
| Benchmarks | ||||||
| Debt to Equity (including Operating Lease Liability), Competitors2 | ||||||
| AbbVie Inc. | 5.03 | — | — | — | — | |
| Amgen Inc. | 5.07 | — | — | — | — | |
| Bristol-Myers Squibb Co. | 1.27 | — | — | — | — | |
| Danaher Corp. | 0.52 | — | — | — | — | |
| Eli Lilly & Co. | 1.96 | — | — | — | — | |
| Gilead Sciences Inc. | 1.30 | — | — | — | — | |
| Johnson & Johnson | 0.47 | — | — | — | — | |
| Merck & Co. Inc. | 0.91 | — | — | — | — | |
| Pfizer Inc. | 0.54 | — | — | — | — | |
| Regeneron Pharmaceuticals Inc. | 0.15 | — | — | — | — | |
| Thermo Fisher Scientific Inc. | 0.89 | — | — | — | — | |
| Vertex Pharmaceuticals Inc. | 0.10 | — | — | — | — | |
| Debt to Equity (including Operating Lease Liability), Sector | ||||||
| Pharmaceuticals, Biotechnology & Life Sciences | 0.96 | — | — | — | — | |
| Debt to Equity (including Operating Lease Liability), Industry | ||||||
| Health Care | 0.83 | — | — | — | — | |
Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).
1 2021 Calculation
Debt to equity (including operating lease liability) = Total debt (including operating lease liability) ÷ Total Biogen Inc. shareholders’ equity
= 7,692,600 ÷ 10,896,200 = 0.71
2 Click competitor name to see calculations.
The solvency profile of Biogen Inc. exhibited relative stability between 2017 and 2019, followed by a notable increase in leverage during the 2020 and 2021 fiscal years. The Debt to Equity ratio, which incorporates operating lease liabilities, shifted from a consistent range of 0.46 to 0.48 to a higher plateau, peaking at 0.74 in 2020 before moderating slightly in 2021.
- Total Debt Trends
- Total debt remained nearly flat between 2017 and 2018 at approximately US$ 5.9 billion. An upward trend began in 2019, with debt rising to US$ 6.44 billion, followed by a significant increase to US$ 7.91 billion in 2020. A minor reduction was observed by the end of 2021, with the balance settling at US$ 7.69 billion.
- Shareholders' Equity Trends
- Equity showed a positive trajectory from 2017 through 2019, increasing from US$ 12.61 billion to a peak of US$ 13.34 billion. A sharp contraction occurred in 2020, where equity fell to US$ 10.70 billion. A marginal recovery was recorded in 2021, with equity rising to US$ 10.90 billion.
- Debt to Equity Ratio Analysis
- The Debt to Equity ratio remained stable from 2017 to 2019, fluctuating minimally between 0.46 and 0.48. The ratio experienced a substantial spike to 0.74 in 2020, resulting from the simultaneous increase in total debt and the decrease in shareholders' equity. This ratio moderated to 0.71 in 2021, reflecting a slight improvement in the balance between liabilities and equity.
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Debt to Capital
Biogen Inc., debt to capital calculation, comparison to benchmarks
| Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||
| Current portion of notes payable | 999,100) | —) | 1,495,800) | —) | 3,200) | |
| Notes payable, excluding current portion | 6,274,000) | 7,426,200) | 4,459,000) | 5,936,500) | 5,935,000) | |
| Total debt | 7,273,100) | 7,426,200) | 5,954,800) | 5,936,500) | 5,938,200) | |
| Total Biogen Inc. shareholders’ equity | 10,896,200) | 10,700,300) | 13,343,200) | 13,039,600) | 12,612,800) | |
| Total capital | 18,169,300) | 18,126,500) | 19,298,000) | 18,976,100) | 18,551,000) | |
| Solvency Ratio | ||||||
| Debt to capital1 | 0.40 | 0.41 | 0.31 | 0.31 | 0.32 | |
| Benchmarks | ||||||
| Debt to Capital, Competitors2 | ||||||
| AbbVie Inc. | 0.83 | — | — | — | — | |
| Amgen Inc. | 0.83 | — | — | — | — | |
| Bristol-Myers Squibb Co. | 0.55 | — | — | — | — | |
| Danaher Corp. | 0.33 | — | — | — | — | |
| Eli Lilly & Co. | 0.65 | — | — | — | — | |
| Gilead Sciences Inc. | 0.56 | — | — | — | — | |
| Johnson & Johnson | 0.31 | — | — | — | — | |
| Merck & Co. Inc. | 0.46 | — | — | — | — | |
| Pfizer Inc. | 0.33 | — | — | — | — | |
| Regeneron Pharmaceuticals Inc. | 0.13 | — | — | — | — | |
| Thermo Fisher Scientific Inc. | 0.46 | — | — | — | — | |
| Vertex Pharmaceuticals Inc. | 0.05 | — | — | — | — | |
| Debt to Capital, Sector | ||||||
| Pharmaceuticals, Biotechnology & Life Sciences | 0.48 | — | — | — | — | |
| Debt to Capital, Industry | ||||||
| Health Care | 0.44 | — | — | — | — | |
Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).
1 2021 Calculation
Debt to capital = Total debt ÷ Total capital
= 7,273,100 ÷ 18,169,300 = 0.40
2 Click competitor name to see calculations.
The solvency profile of the organization exhibits a period of stability followed by a significant shift in capital structure beginning in 2020.
- Total Debt Trends
- Between 2017 and 2019, total debt remained nearly constant, fluctuating marginally around 5.9 billion. A substantial increase occurred in 2020, where debt rose to approximately 7.4 billion, representing a notable expansion of liabilities. This figure saw a slight contraction to approximately 7.3 billion by the end of 2021.
- Total Capital Dynamics
- Total capital showed a modest upward trajectory from 2017 through 2019, peaking at approximately 19.3 billion. However, a decline was observed in 2020, with total capital dropping to approximately 18.1 billion, a level that remained relatively stagnant into 2021.
- Debt to Capital Ratio Analysis
- The debt to capital ratio reflects the combined impact of increased borrowing and a reduction in total capital. From 2017 to 2019, the ratio remained stable, ranging between 0.31 and 0.32. In 2020, the ratio experienced a sharp increase to 0.41, indicating a higher reliance on debt financing relative to the total capital base. This ratio marginally decreased to 0.40 in 2021, suggesting the capital structure has stabilized at a higher leverage level than was maintained during the 2017-2019 period.
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Debt to Capital (including Operating Lease Liability)
Biogen Inc., debt to capital (including operating lease liability) calculation, comparison to benchmarks
| Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||
| Current portion of notes payable | 999,100) | —) | 1,495,800) | —) | 3,200) | |
| Notes payable, excluding current portion | 6,274,000) | 7,426,200) | 4,459,000) | 5,936,500) | 5,935,000) | |
| Total debt | 7,273,100) | 7,426,200) | 5,954,800) | 5,936,500) | 5,938,200) | |
| Current operating lease liabilities (included in Accrued expenses and other) | 89,100) | 83,200) | 73,600) | —) | —) | |
| Long-term operating lease liabilities | 330,400) | 402,000) | 412,700) | —) | —) | |
| Total debt (including operating lease liability) | 7,692,600) | 7,911,400) | 6,441,100) | 5,936,500) | 5,938,200) | |
| Total Biogen Inc. shareholders’ equity | 10,896,200) | 10,700,300) | 13,343,200) | 13,039,600) | 12,612,800) | |
| Total capital (including operating lease liability) | 18,588,800) | 18,611,700) | 19,784,300) | 18,976,100) | 18,551,000) | |
| Solvency Ratio | ||||||
| Debt to capital (including operating lease liability)1 | 0.41 | 0.43 | 0.33 | 0.31 | 0.32 | |
| Benchmarks | ||||||
| Debt to Capital (including Operating Lease Liability), Competitors2 | ||||||
| AbbVie Inc. | 0.83 | — | — | — | — | |
| Amgen Inc. | 0.84 | — | — | — | — | |
| Bristol-Myers Squibb Co. | 0.56 | — | — | — | — | |
| Danaher Corp. | 0.34 | — | — | — | — | |
| Eli Lilly & Co. | 0.66 | — | — | — | — | |
| Gilead Sciences Inc. | 0.56 | — | — | — | — | |
| Johnson & Johnson | 0.32 | — | — | — | — | |
| Merck & Co. Inc. | 0.48 | — | — | — | — | |
| Pfizer Inc. | 0.35 | — | — | — | — | |
| Regeneron Pharmaceuticals Inc. | 0.13 | — | — | — | — | |
| Thermo Fisher Scientific Inc. | 0.47 | — | — | — | — | |
| Vertex Pharmaceuticals Inc. | 0.09 | — | — | — | — | |
| Debt to Capital (including Operating Lease Liability), Sector | ||||||
| Pharmaceuticals, Biotechnology & Life Sciences | 0.49 | — | — | — | — | |
| Debt to Capital (including Operating Lease Liability), Industry | ||||||
| Health Care | 0.45 | — | — | — | — | |
Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).
1 2021 Calculation
Debt to capital (including operating lease liability) = Total debt (including operating lease liability) ÷ Total capital (including operating lease liability)
= 7,692,600 ÷ 18,588,800 = 0.41
2 Click competitor name to see calculations.
An analysis of the solvency position from 2017 to 2021 indicates an overall increase in financial leverage, characterized by a rise in total debt relative to the total capital structure.
- Total Debt Obligations
- Total debt, inclusive of operating lease liabilities, remained nearly stagnant between 2017 and 2018 at approximately US$ 5.9 billion. A gradual increase was observed in 2019, followed by a significant escalation to US$ 7.9 billion in 2020. This upward trend peaked in 2020 before a slight contraction to US$ 7.7 billion was recorded in 2021.
- Total Capitalization Trends
- Total capital showed relative stability, increasing from US$ 18.6 billion in 2017 to a peak of US$ 19.8 billion in 2019. Subsequently, total capital declined and leveled off at approximately US$ 18.6 billion in 2020 and 2021. The relative consistency of the capital base suggests that the changes in solvency ratios were primarily driven by debt movements rather than capital infusions or reductions.
- Debt to Capital Ratio Analysis
- The debt to capital ratio remained stable between 0.31 and 0.33 from 2017 through 2019, indicating a consistent leverage strategy. A sharp increase occurred in 2020, with the ratio rising to 0.43, the highest point in the five-year period. Although the ratio moderated slightly to 0.41 in 2021, the solvency profile reflects a higher reliance on debt compared to the 2017-2019 baseline.
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Debt to Assets
Biogen Inc., debt to assets calculation, comparison to benchmarks
| Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||
| Current portion of notes payable | 999,100) | —) | 1,495,800) | —) | 3,200) | |
| Notes payable, excluding current portion | 6,274,000) | 7,426,200) | 4,459,000) | 5,936,500) | 5,935,000) | |
| Total debt | 7,273,100) | 7,426,200) | 5,954,800) | 5,936,500) | 5,938,200) | |
| Total assets | 23,877,300) | 24,618,900) | 27,234,300) | 25,288,900) | 23,652,600) | |
| Solvency Ratio | ||||||
| Debt to assets1 | 0.30 | 0.30 | 0.22 | 0.23 | 0.25 | |
| Benchmarks | ||||||
| Debt to Assets, Competitors2 | ||||||
| AbbVie Inc. | 0.52 | — | — | — | — | |
| Amgen Inc. | 0.54 | — | — | — | — | |
| Bristol-Myers Squibb Co. | 0.41 | — | — | — | — | |
| Danaher Corp. | 0.27 | — | — | — | — | |
| Eli Lilly & Co. | 0.35 | — | — | — | — | |
| Gilead Sciences Inc. | 0.39 | — | — | — | — | |
| Johnson & Johnson | 0.19 | — | — | — | — | |
| Merck & Co. Inc. | 0.31 | — | — | — | — | |
| Pfizer Inc. | 0.21 | — | — | — | — | |
| Regeneron Pharmaceuticals Inc. | 0.11 | — | — | — | — | |
| Thermo Fisher Scientific Inc. | 0.37 | — | — | — | — | |
| Vertex Pharmaceuticals Inc. | 0.04 | — | — | — | — | |
| Debt to Assets, Sector | ||||||
| Pharmaceuticals, Biotechnology & Life Sciences | 0.32 | — | — | — | — | |
| Debt to Assets, Industry | ||||||
| Health Care | 0.30 | — | — | — | — | |
Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).
1 2021 Calculation
Debt to assets = Total debt ÷ Total assets
= 7,273,100 ÷ 23,877,300 = 0.30
2 Click competitor name to see calculations.
The solvency profile exhibits two distinct phases between 2017 and 2021. The initial period is characterized by an improving solvency position driven by asset expansion, while the subsequent period reflects increased financial leverage and a contraction of the asset base.
- Asset Dynamics and Early Deleveraging (2017–2019)
- Between December 31, 2017, and December 31, 2019, a consistent growth in total assets is observed, rising from 23,652,600 thousand US$ to 27,234,300 thousand US$. During this same interval, total debt remained nearly constant, fluctuating minimally around the 5.9 billion US$ mark. This combination of asset growth and stable debt levels resulted in a gradual decline of the debt-to-assets ratio from 0.25 to 0.22, indicating an improvement in the company's solvency position.
- Leverage Expansion and Asset Contraction (2020–2021)
- A significant shift occurred in 2020, where total debt increased sharply to 7,426,200 thousand US$ from the previous year's 5,954,800 thousand US$. Concurrently, total assets experienced a contraction, falling to 24,618,900 thousand US$. These opposing movements led to a substantial increase in the debt-to-assets ratio, which rose to 0.30 by December 31, 2020.
- Recent Solvency Stability (2021)
- As of December 31, 2021, the debt-to-assets ratio remained stable at 0.30. This stability resulted from a simultaneous marginal decrease in both total debt, which fell to 7,273,100 thousand US$, and total assets, which declined further to 23,877,300 thousand US$. The proportional reduction in both balances maintained the leverage ratio at the elevated 2020 level.
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Debt to Assets (including Operating Lease Liability)
Biogen Inc., debt to assets (including operating lease liability) calculation, comparison to benchmarks
| Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||
| Current portion of notes payable | 999,100) | —) | 1,495,800) | —) | 3,200) | |
| Notes payable, excluding current portion | 6,274,000) | 7,426,200) | 4,459,000) | 5,936,500) | 5,935,000) | |
| Total debt | 7,273,100) | 7,426,200) | 5,954,800) | 5,936,500) | 5,938,200) | |
| Current operating lease liabilities (included in Accrued expenses and other) | 89,100) | 83,200) | 73,600) | —) | —) | |
| Long-term operating lease liabilities | 330,400) | 402,000) | 412,700) | —) | —) | |
| Total debt (including operating lease liability) | 7,692,600) | 7,911,400) | 6,441,100) | 5,936,500) | 5,938,200) | |
| Total assets | 23,877,300) | 24,618,900) | 27,234,300) | 25,288,900) | 23,652,600) | |
| Solvency Ratio | ||||||
| Debt to assets (including operating lease liability)1 | 0.32 | 0.32 | 0.24 | 0.23 | 0.25 | |
| Benchmarks | ||||||
| Debt to Assets (including Operating Lease Liability), Competitors2 | ||||||
| AbbVie Inc. | 0.53 | — | — | — | — | |
| Amgen Inc. | 0.56 | — | — | — | — | |
| Bristol-Myers Squibb Co. | 0.42 | — | — | — | — | |
| Danaher Corp. | 0.28 | — | — | — | — | |
| Eli Lilly & Co. | 0.36 | — | — | — | — | |
| Gilead Sciences Inc. | 0.40 | — | — | — | — | |
| Johnson & Johnson | 0.19 | — | — | — | — | |
| Merck & Co. Inc. | 0.33 | — | — | — | — | |
| Pfizer Inc. | 0.23 | — | — | — | — | |
| Regeneron Pharmaceuticals Inc. | 0.11 | — | — | — | — | |
| Thermo Fisher Scientific Inc. | 0.38 | — | — | — | — | |
| Vertex Pharmaceuticals Inc. | 0.07 | — | — | — | — | |
| Debt to Assets (including Operating Lease Liability), Sector | ||||||
| Pharmaceuticals, Biotechnology & Life Sciences | 0.34 | — | — | — | — | |
| Debt to Assets (including Operating Lease Liability), Industry | ||||||
| Health Care | 0.31 | — | — | — | — | |
Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).
1 2021 Calculation
Debt to assets (including operating lease liability) = Total debt (including operating lease liability) ÷ Total assets
= 7,692,600 ÷ 23,877,300 = 0.32
2 Click competitor name to see calculations.
The analysis of solvency ratios from 2017 to 2021 indicates a notable increase in the proportion of assets financed by debt. While the debt-to-assets ratio remained relatively stable during the first three years of the period, a significant shift occurred in 2020, leading to a higher leverage profile that persisted into 2021.
- Total Debt Trends
- Total debt, inclusive of operating lease liabilities, remained nearly constant between 2017 and 2018 at approximately 5.9 billion US$. A growth phase began in 2019, with debt rising to 6.4 billion US$, followed by a sharp increase to 7.9 billion US$ by the end of 2020. A slight reduction was observed in 2021, with debt decreasing to approximately 7.7 billion US$.
- Total Asset Trajectory
- Total assets exhibited an upward trend from 2017 to 2019, peaking at 27.2 billion US$. This trend reversed in 2020 and 2021, with total assets declining to 24.6 billion US$ and 23.9 billion US$, respectively.
- Debt to Assets Ratio Analysis
- The debt-to-assets ratio fluctuated within a narrow range of 0.23 to 0.25 between 2017 and 2019. In 2020, the ratio experienced a sharp increase to 0.32, driven by the simultaneous rise in total debt and the contraction of the asset base. This ratio remained unchanged at 0.32 in 2021, signaling a stabilized but higher level of financial leverage compared to the initial three-year baseline.
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Financial Leverage
Biogen Inc., financial leverage calculation, comparison to benchmarks
| Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||
| Total assets | 23,877,300) | 24,618,900) | 27,234,300) | 25,288,900) | 23,652,600) | |
| Total Biogen Inc. shareholders’ equity | 10,896,200) | 10,700,300) | 13,343,200) | 13,039,600) | 12,612,800) | |
| Solvency Ratio | ||||||
| Financial leverage1 | 2.19 | 2.30 | 2.04 | 1.94 | 1.88 | |
| Benchmarks | ||||||
| Financial Leverage, Competitors2 | ||||||
| AbbVie Inc. | 9.51 | — | — | — | — | |
| Amgen Inc. | 9.13 | — | — | — | — | |
| Bristol-Myers Squibb Co. | 3.04 | — | — | — | — | |
| Danaher Corp. | 1.84 | — | — | — | — | |
| Eli Lilly & Co. | 5.44 | — | — | — | — | |
| Gilead Sciences Inc. | 3.23 | — | — | — | — | |
| Johnson & Johnson | 2.46 | — | — | — | — | |
| Merck & Co. Inc. | 2.77 | — | — | — | — | |
| Pfizer Inc. | 2.35 | — | — | — | — | |
| Regeneron Pharmaceuticals Inc. | 1.36 | — | — | — | — | |
| Thermo Fisher Scientific Inc. | 2.33 | — | — | — | — | |
| Vertex Pharmaceuticals Inc. | 1.33 | — | — | — | — | |
| Financial Leverage, Sector | ||||||
| Pharmaceuticals, Biotechnology & Life Sciences | 2.86 | — | — | — | — | |
| Financial Leverage, Industry | ||||||
| Health Care | 2.69 | — | — | — | — | |
Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).
1 2021 Calculation
Financial leverage = Total assets ÷ Total Biogen Inc. shareholders’ equity
= 23,877,300 ÷ 10,896,200 = 2.19
2 Click competitor name to see calculations.
An analysis of the financial structure between 2017 and 2021 reveals a fluctuating relationship between total assets and shareholders' equity. Total assets experienced a period of expansion, peaking in 2019 at 27.23 billion USD, followed by a contraction over the subsequent two years, ending at 23.88 billion USD in 2021.
- Financial Leverage Trend
- The financial leverage ratio exhibited a consistent upward trajectory from 2017 to 2020, rising from 1.88 to a peak of 2.30. This trend indicates a progressive increase in the proportion of assets financed by liabilities relative to shareholders' equity during this four-year period.
- Equity Dynamics and Leverage Impact
- Shareholders' equity showed marginal growth between 2017 and 2019, reaching 13.34 billion USD. A significant contraction occurred in 2020, with equity falling to 10.70 billion USD. Because the decrease in equity was more pronounced than the simultaneous decline in total assets, the financial leverage ratio reached its highest point in 2020.
- Recent Stabilization
- By December 31, 2021, the financial leverage ratio decreased to 2.19. This decline was driven by a modest recovery in shareholders' equity to 10.90 billion USD combined with a continued reduction in the total asset base, suggesting a slight reduction in financial risk and leverage.
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Interest Coverage
Biogen Inc., interest coverage calculation, comparison to benchmarks
| Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||
| Net income attributable to Biogen Inc. | 1,556,100) | 4,000,600) | 5,888,500) | 4,430,700) | 2,539,100) | |
| Add: Net income attributable to noncontrolling interest | 171,500) | 59,900) | —) | 43,300) | 131,000) | |
| Add: Income tax expense | 52,500) | 992,300) | 1,158,000) | 1,425,600) | 2,458,700) | |
| Add: Interest expense | 253,600) | 222,500) | 187,400) | 200,600) | 250,800) | |
| Earnings before interest and tax (EBIT) | 2,033,700) | 5,275,300) | 7,233,900) | 6,100,200) | 5,379,600) | |
| Solvency Ratio | ||||||
| Interest coverage1 | 8.02 | 23.71 | 38.60 | 30.41 | 21.45 | |
| Benchmarks | ||||||
| Interest Coverage, Competitors2 | ||||||
| AbbVie Inc. | 6.36 | — | — | — | — | |
| Amgen Inc. | 6.60 | — | — | — | — | |
| Bristol-Myers Squibb Co. | 7.07 | — | — | — | — | |
| Danaher Corp. | 32.92 | — | — | — | — | |
| Eli Lilly & Co. | 19.12 | — | — | — | — | |
| Gilead Sciences Inc. | 9.27 | — | — | — | — | |
| Johnson & Johnson | 125.46 | — | — | — | — | |
| Merck & Co. Inc. | 18.22 | — | — | — | — | |
| Pfizer Inc. | 19.83 | — | — | — | — | |
| Regeneron Pharmaceuticals Inc. | 163.75 | — | — | — | — | |
| Thermo Fisher Scientific Inc. | 17.49 | — | — | — | — | |
| Vertex Pharmaceuticals Inc. | 45.40 | — | — | — | — | |
| Interest Coverage, Sector | ||||||
| Pharmaceuticals, Biotechnology & Life Sciences | 14.91 | — | — | — | — | |
| Interest Coverage, Industry | ||||||
| Health Care | 14.14 | — | — | — | — | |
Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).
1 2021 Calculation
Interest coverage = EBIT ÷ Interest expense
= 2,033,700 ÷ 253,600 = 8.02
2 Click competitor name to see calculations.
An analysis of the solvency metrics from 2017 to 2021 reveals a period of strengthening financial flexibility followed by a significant contraction in the company's ability to service its debt obligations from operating profits.
- Earnings Before Interest and Tax (EBIT)
- Operating performance demonstrated an upward trajectory between 2017 and 2019, with EBIT rising from US$ 5,379,600 thousand to a peak of US$ 7,233,900 thousand. However, this trend reversed sharply starting in 2020, with earnings falling to US$ 5,275,300 thousand, and experiencing a further steep decline to US$ 2,033,700 thousand by December 31, 2021. This represents a substantial reduction in operating income over the final two years of the period.
- Interest Expense
- Interest costs remained relatively stable with minor fluctuations. Expenses decreased from US$ 250,800 thousand in 2017 to a low of US$ 187,400 thousand in 2019. Subsequently, there was a gradual increase in interest obligations, returning to US$ 253,600 thousand by 2021, slightly exceeding the 2017 levels.
- Interest Coverage Ratio
- The interest coverage ratio mirrored the volatility of the EBIT. The ratio improved significantly from 21.45 in 2017 to a peak of 38.60 in 2019, indicating a high margin of safety for debt servicing. This position deteriorated rapidly in 2020 to 23.71 and collapsed to 8.02 by the end of 2021. The decline is primarily driven by the precipitous drop in operating earnings occurring simultaneously with rising interest expenses.
The convergence of declining operating profits and increasing interest costs has resulted in a marked reduction in the solvency buffer. While the coverage ratio remains above 1.0, the downward trend suggests a weakening of the financial cushion used to meet interest payments.
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Fixed Charge Coverage
Biogen Inc., fixed charge coverage calculation, comparison to benchmarks
| Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||
| Net income attributable to Biogen Inc. | 1,556,100) | 4,000,600) | 5,888,500) | 4,430,700) | 2,539,100) | |
| Add: Net income attributable to noncontrolling interest | 171,500) | 59,900) | —) | 43,300) | 131,000) | |
| Add: Income tax expense | 52,500) | 992,300) | 1,158,000) | 1,425,600) | 2,458,700) | |
| Add: Interest expense | 253,600) | 222,500) | 187,400) | 200,600) | 250,800) | |
| Earnings before interest and tax (EBIT) | 2,033,700) | 5,275,300) | 7,233,900) | 6,100,200) | 5,379,600) | |
| Add: Operating lease cost | 99,300) | 98,300) | 91,300) | 64,500) | 65,300) | |
| Earnings before fixed charges and tax | 2,133,000) | 5,373,600) | 7,325,200) | 6,164,700) | 5,444,900) | |
| Interest expense | 253,600) | 222,500) | 187,400) | 200,600) | 250,800) | |
| Operating lease cost | 99,300) | 98,300) | 91,300) | 64,500) | 65,300) | |
| Fixed charges | 352,900) | 320,800) | 278,700) | 265,100) | 316,100) | |
| Solvency Ratio | ||||||
| Fixed charge coverage1 | 6.04 | 16.75 | 26.28 | 23.25 | 17.23 | |
| Benchmarks | ||||||
| Fixed Charge Coverage, Competitors2 | ||||||
| AbbVie Inc. | 5.90 | — | — | — | — | |
| Amgen Inc. | 5.67 | — | — | — | — | |
| Bristol-Myers Squibb Co. | 6.01 | — | — | — | — | |
| Danaher Corp. | 10.85 | — | — | — | — | |
| Eli Lilly & Co. | 13.33 | — | — | — | — | |
| Gilead Sciences Inc. | 8.15 | — | — | — | — | |
| Johnson & Johnson | 48.16 | — | — | — | — | |
| Merck & Co. Inc. | 13.08 | — | — | — | — | |
| Pfizer Inc. | 14.22 | — | — | — | — | |
| Regeneron Pharmaceuticals Inc. | 138.96 | — | — | — | — | |
| Thermo Fisher Scientific Inc. | 12.19 | — | — | — | — | |
| Vertex Pharmaceuticals Inc. | 29.62 | — | — | — | — | |
| Fixed Charge Coverage, Sector | ||||||
| Pharmaceuticals, Biotechnology & Life Sciences | 11.49 | — | — | — | — | |
| Fixed Charge Coverage, Industry | ||||||
| Health Care | 10.48 | — | — | — | — | |
Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).
1 2021 Calculation
Fixed charge coverage = Earnings before fixed charges and tax ÷ Fixed charges
= 2,133,000 ÷ 352,900 = 6.04
2 Click competitor name to see calculations.
The analysis of solvency ratios indicates a significant deterioration in the company's capacity to meet its fixed obligations over the five-year period ending December 31, 2021. While the period from 2017 to 2019 was characterized by strengthening solvency and increasing earnings, a sharp reversal occurred starting in 2020, leading to a substantial reduction in the margin of safety by 2021.
- Earnings before Fixed Charges and Tax
- A growth phase is observed between 2017 and 2019, with values rising from US$ 5,444,900 thousand to a peak of US$ 7,325,200 thousand. This upward trend was followed by a severe contraction; earnings fell to US$ 5,373,600 thousand in 2020 and continued to decline sharply to US$ 2,133,000 thousand by the end of 2021, representing a significant erosion of the income available to cover fixed costs.
- Fixed Charges
- Fixed obligations exhibited relative stability through 2019, with a slight decrease in 2018. However, from 2020 onward, a consistent upward trend is evident, with charges increasing from US$ 278,700 thousand in 2019 to US$ 352,900 thousand in 2021. This increase in obligations occurred simultaneously with the decline in earnings.
- Fixed Charge Coverage Ratio
- The coverage ratio improved from 17.23 in 2017 to a peak of 26.28 in 2019, signaling an exceptionally strong ability to service fixed charges. This position weakened considerably in 2020 as the ratio dropped to 16.75, and the decline accelerated in 2021, ending at 6.04. The precipitous drop in the ratio is attributed to the dual impact of contracting earnings and rising fixed expenditures, resulting in a weakened solvency profile compared to the 2017-2019 baseline.
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