Analysis of Profitability Ratios
Profitability ratios measure the company ability to generate profitable sales from its resources (assets).
Profitability Ratios (Summary)
Biogen Inc., profitability 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).
- Gross Profit Margin
- The gross profit margin remained relatively stable from 2017 through 2020, fluctuating slightly between 86.4% and 86.72%. However, there was a noticeable decline in 2021, dropping to 80.79%. This downward shift may indicate increased costs of goods sold or pricing pressures affecting the company's core profitability at the gross level.
- Operating Profit Margin
- The operating profit margin exhibited a rising trend from 2017 to 2019, increasing from 43.54% to a peak of 48.98%. Following this peak, the margin declined sharply in the subsequent years, falling to 33.84% in 2020 and further to 25.87% in 2021. This pattern suggests diminishing operational efficiency or rising operating expenses after 2019.
- Net Profit Margin
- The net profit margin showed substantial growth from 20.69% in 2017 to 40.96% in 2019, indicating improved overall profitability. Yet, this margin contracted significantly in 2020 and even more steeply in 2021, dropping to 14.17%. This decline may reflect increased non-operating expenses, taxes, or other factors impacting the company's bottom line post-2019.
- Return on Equity (ROE)
- Return on equity followed a similar pattern to net profit margin, rising from 20.13% in 2017 to a high of 44.13% in 2019, which implies strong shareholder value creation during this period. Subsequently, ROE dropped considerably to 14.28% in 2021, suggesting reduced profitability relative to shareholders' equity in the later years.
- Return on Assets (ROA)
- The return on assets increased steadily from 10.73% in 2017 to 21.62% in 2019, indicating enhanced efficiency in asset utilization for generating profit. From 2020 onward, ROA declined sharply to 6.52% in 2021, signaling less effective use of assets to generate earnings during this timeframe.
Return on Sales
Return on Investment
Gross Profit Margin
Biogen Inc., gross profit margin 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) | ||||||
| Gross profit | 8,872,000) | 11,639,400) | 12,422,500) | 11,636,600) | 10,643,900) | |
| Revenue | 10,981,700) | 13,444,600) | 14,377,900) | 13,452,900) | 12,273,900) | |
| Profitability Ratio | ||||||
| Gross profit margin1 | 80.79% | 86.57% | 86.40% | 86.50% | 86.72% | |
| Benchmarks | ||||||
| Gross Profit Margin, Competitors2 | ||||||
| AbbVie Inc. | 68.96% | 66.41% | — | — | — | |
| Amgen Inc. | 73.44% | 74.59% | — | — | — | |
| Bristol-Myers Squibb Co. | 78.57% | 72.31% | — | — | — | |
| Danaher Corp. | 60.95% | 55.98% | — | — | — | |
| Eli Lilly & Co. | 74.18% | 77.66% | — | — | — | |
| Gilead Sciences Inc. | 75.56% | 81.23% | — | — | — | |
| Johnson & Johnson | 68.16% | 65.58% | — | — | — | |
| Merck & Co. Inc. | 72.02% | 67.74% | — | — | — | |
| Pfizer Inc. | 62.48% | 79.63% | — | — | — | |
| Regeneron Pharmaceuticals Inc. | 84.83% | 86.82% | — | — | — | |
| Thermo Fisher Scientific Inc. | 50.08% | 49.67% | — | — | — | |
| Vertex Pharmaceuticals Inc. | 88.06% | 88.14% | — | — | — | |
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
Gross profit margin = 100 × Gross profit ÷ Revenue
= 100 × 8,872,000 ÷ 10,981,700 = 80.79%
2 Click competitor name to see calculations.
- Revenue Trends
- Revenue exhibited a consistent upward trend from 2017 to 2019, increasing from approximately 12.3 billion US dollars to 14.4 billion US dollars. However, there was a decline beginning in 2020, with revenue dropping to about 13.4 billion US dollars and further decreasing in 2021 to roughly 11.0 billion US dollars.
- Gross Profit Trends
- Gross profit mirrored the revenue trend, rising from around 10.6 billion US dollars in 2017 to a peak of approximately 12.4 billion in 2019. This was followed by a decline in 2020 to about 11.6 billion and a more marked decrease in 2021 down to approximately 8.9 billion US dollars.
- Gross Profit Margin Analysis
- The gross profit margin remained relatively stable and high from 2017 through 2020, fluctuating narrowly between approximately 86.4% and 86.7%. In contrast, 2021 saw a notable decrease in this margin to roughly 80.8%, indicating a reduction in profitability relative to revenue during that year.
- Overall Insights
- The analysis reveals strong growth in revenue and gross profit through 2019, followed by a downturn beginning in 2020 that intensified in 2021. The reduction in gross profit margin in 2021 suggests increased costs or decreased pricing power impacting profitability. These trends highlight a period of challenge after several years of growth.
Operating Profit Margin
Biogen Inc., operating profit margin 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) | ||||||
| Income from operations | 2,840,700) | 4,550,100) | 7,042,600) | 5,888,600) | 5,344,200) | |
| Revenue | 10,981,700) | 13,444,600) | 14,377,900) | 13,452,900) | 12,273,900) | |
| Profitability Ratio | ||||||
| Operating profit margin1 | 25.87% | 33.84% | 48.98% | 43.77% | 43.54% | |
| Benchmarks | ||||||
| Operating Profit Margin, Competitors2 | ||||||
| AbbVie Inc. | 31.89% | 24.81% | — | — | — | |
| Amgen Inc. | 31.44% | 37.70% | — | — | — | |
| Bristol-Myers Squibb Co. | 15.91% | -21.60% | — | — | — | |
| Danaher Corp. | 25.35% | 18.99% | — | — | — | |
| Eli Lilly & Co. | 22.45% | 24.69% | — | — | — | |
| Gilead Sciences Inc. | 36.72% | 16.72% | — | — | — | |
| Johnson & Johnson | 24.95% | 23.60% | — | — | — | |
| Merck & Co. Inc. | 25.74% | 16.47% | — | — | — | |
| Pfizer Inc. | 24.70% | 20.92% | — | — | — | |
| Regeneron Pharmaceuticals Inc. | 55.67% | 42.09% | — | — | — | |
| Thermo Fisher Scientific Inc. | 25.57% | 24.19% | — | — | — | |
| Vertex Pharmaceuticals Inc. | 36.73% | 46.03% | — | — | — | |
| Operating Profit Margin, Sector | ||||||
| Pharmaceuticals, Biotechnology & Life Sciences | 26.98% | 18.87% | — | — | — | |
| Operating Profit Margin, Industry | ||||||
| Health Care | 14.99% | 11.62% | — | — | — | |
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
Operating profit margin = 100 × Income from operations ÷ Revenue
= 100 × 2,840,700 ÷ 10,981,700 = 25.87%
2 Click competitor name to see calculations.
- Revenue Trends
- Revenue demonstrated an overall upward trajectory from 2017 through 2019, increasing from approximately 12.27 billion US dollars to 14.38 billion US dollars. However, a decline is observed in subsequent years, with revenue decreasing to about 13.44 billion in 2020 and further declining to approximately 10.98 billion by the end of 2021.
- Income from Operations
- Income from operations followed a similar pattern to revenue, increasing steadily between 2017 and 2019 from roughly 5.34 billion US dollars to 7.04 billion US dollars. This was succeeded by a significant reduction in 2020 to around 4.55 billion, and a continued decrease in 2021 to 2.84 billion US dollars. This pattern suggests that operational earnings were positively correlated with revenue over the analyzed periods.
- Operating Profit Margin
- The operating profit margin exhibited an increase from 43.54% in 2017 to a peak of 48.98% in 2019, indicating improved efficiency or cost management during this period. However, a marked decline followed, with the margin dropping to 33.84% in 2020 and further to 25.87% in 2021, pointing to reduced profitability relative to revenues in the latter years.
- Overall Insights
- From 2017 to 2019, the company experienced growth in both revenue and income from operations, accompanied by increasing operating profit margins, reflecting a period of strong financial performance. The trend reversed starting in 2020, with declines in revenue, operating income, and profit margins, signaling challenges impacting operational efficiency and profitability. The decreasing margins suggest that expenses and costs might have risen or that pricing pressures increased during the later period, reducing operational profitability despite the scale of revenues.
Net Profit Margin
Biogen Inc., net profit margin 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) | |
| Revenue | 10,981,700) | 13,444,600) | 14,377,900) | 13,452,900) | 12,273,900) | |
| Profitability Ratio | ||||||
| Net profit margin1 | 14.17% | 29.76% | 40.96% | 32.93% | 20.69% | |
| Benchmarks | ||||||
| Net Profit Margin, Competitors2 | ||||||
| AbbVie Inc. | 20.54% | 10.08% | — | — | — | |
| Amgen Inc. | 24.25% | 29.97% | — | — | — | |
| Bristol-Myers Squibb Co. | 15.08% | -21.20% | — | — | — | |
| Danaher Corp. | 21.84% | 16.36% | — | — | — | |
| Eli Lilly & Co. | 19.71% | 25.24% | — | — | — | |
| Gilead Sciences Inc. | 23.05% | 0.51% | — | — | — | |
| Johnson & Johnson | 22.26% | 17.82% | — | — | — | |
| Merck & Co. Inc. | 26.79% | 14.72% | — | — | — | |
| Pfizer Inc. | 26.76% | 22.53% | — | — | — | |
| Regeneron Pharmaceuticals Inc. | 50.25% | 41.35% | — | — | — | |
| Thermo Fisher Scientific Inc. | 19.70% | 19.79% | — | — | — | |
| Vertex Pharmaceuticals Inc. | 30.92% | 43.70% | — | — | — | |
| Net Profit Margin, Sector | ||||||
| Pharmaceuticals, Biotechnology & Life Sciences | 23.38% | 14.07% | — | — | — | |
| Net Profit Margin, Industry | ||||||
| Health Care | 12.42% | 8.45% | — | — | — | |
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
Net profit margin = 100 × Net income attributable to Biogen Inc. ÷ Revenue
= 100 × 1,556,100 ÷ 10,981,700 = 14.17%
2 Click competitor name to see calculations.
The financial data over the five-year period reflects notable fluctuations in key performance indicators. Net income attributable to the company initially shows a strong upward trend, increasing from approximately 2.54 billion US dollars in 2017 to a peak of about 5.89 billion US dollars in 2019. However, after this peak, net income experiences a significant decline, falling to around 4.00 billion US dollars in 2020 and further dropping to approximately 1.56 billion US dollars by the end of 2021.
Revenue exhibits a generally positive trend from 2017 through 2019, rising from approximately 12.27 billion US dollars to nearly 14.38 billion US dollars. This growth plateaus and then reverses in subsequent years, as revenue decreases to about 13.45 billion US dollars in 2020 and further declines sharply to approximately 10.98 billion US dollars in 2021.
The net profit margin follows a pattern consistent with net income trends. It improves substantially from 20.69% in 2017 to a high of 40.96% in 2019, indicating enhanced profitability relative to revenue during this period. However, the margin declines notably to 29.76% in 2020 and deteriorates further to 14.17% in 2021, reflecting reduced profitability on a relative basis alongside the decreases in net income and revenue.
- Overall observations:
- - The period until 2019 shows strong growth in both profitability and revenue, suggesting effective operational and financial management.
- - Post-2019, there is a clear downturn in financial performance, with sharp decreases in net income, revenue, and profit margins.
- - The declining profitability margins in the last two years point to increased costs or decreased pricing power relative to revenue levels.
- - The significant drop in net income and revenue in 2021 may signal challenges such as market conditions, competitive pressures, or internal operational issues.
Return on Equity (ROE)
Biogen Inc., ROE 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) | |
| Total Biogen Inc. shareholders’ equity | 10,896,200) | 10,700,300) | 13,343,200) | 13,039,600) | 12,612,800) | |
| Profitability Ratio | ||||||
| ROE1 | 14.28% | 37.39% | 44.13% | 33.98% | 20.13% | |
| Benchmarks | ||||||
| ROE, Competitors2 | ||||||
| AbbVie Inc. | 74.91% | 35.30% | — | — | — | |
| Amgen Inc. | 87.96% | 77.20% | — | — | — | |
| Bristol-Myers Squibb Co. | 19.46% | -23.84% | — | — | — | |
| Danaher Corp. | 14.24% | 9.17% | — | — | — | |
| Eli Lilly & Co. | 62.16% | 109.79% | — | — | — | |
| Gilead Sciences Inc. | 29.55% | 0.68% | — | — | — | |
| Johnson & Johnson | 28.20% | 23.25% | — | — | — | |
| Merck & Co. Inc. | 34.17% | 27.91% | — | — | — | |
| Pfizer Inc. | 28.47% | 15.21% | — | — | — | |
| Regeneron Pharmaceuticals Inc. | 43.03% | 31.86% | — | — | — | |
| Thermo Fisher Scientific Inc. | 18.94% | 18.47% | — | — | — | |
| Vertex Pharmaceuticals Inc. | 23.19% | 31.22% | — | — | — | |
| ROE, Sector | ||||||
| Pharmaceuticals, Biotechnology & Life Sciences | 29.75% | 17.22% | — | — | — | |
| ROE, Industry | ||||||
| Health Care | 23.78% | 15.95% | — | — | — | |
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
ROE = 100 × Net income attributable to Biogen Inc. ÷ Total Biogen Inc. shareholders’ equity
= 100 × 1,556,100 ÷ 10,896,200 = 14.28%
2 Click competitor name to see calculations.
- Net Income Attributable to Biogen Inc.
- The net income demonstrated a notable upward trend from 2017 through 2019, increasing from approximately 2.54 billion USD in 2017 to nearly 5.89 billion USD in 2019. However, in 2020, the net income declined significantly to around 4.00 billion USD, followed by a further decrease in 2021 to approximately 1.56 billion USD. This indicates a peak in profitability during 2019 with a subsequent notable downturn over the next two years.
- Total Biogen Inc. Shareholders’ Equity
- The shareholders' equity showed moderate growth from 2017 to 2019, rising from about 12.61 billion USD to 13.34 billion USD. In 2020, there was a substantial decrease to roughly 10.70 billion USD, which persisted in 2021 at approximately 10.90 billion USD, indicating a contraction in equity coinciding with the reduction in net income in the later years.
- Return on Equity (ROE)
- Return on equity followed the pattern of net income closely, increasing significantly from 20.13% in 2017 to a peak of 44.13% in 2019. It then decreased to 37.39% in 2020 and sharply declined to 14.28% in 2021. The ROE values suggest that the company experienced optimum efficiency in generating profits from equity in 2019 but faced challenges in maintaining this efficiency in the subsequent years.
- Overall Analysis
- The financial data indicates that the company achieved its highest net income and ROE in 2019, signifying a period of strong profitability and effective equity utilization. However, the following two years exhibit a significant decline in both profitability and shareholders’ equity, which has negatively affected the return on equity. This trend may warrant further investigation into underlying causes, such as operational challenges or market conditions influencing performance after 2019.
Return on Assets (ROA)
Biogen Inc., ROA 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) | |
| Total assets | 23,877,300) | 24,618,900) | 27,234,300) | 25,288,900) | 23,652,600) | |
| Profitability Ratio | ||||||
| ROA1 | 6.52% | 16.25% | 21.62% | 17.52% | 10.73% | |
| Benchmarks | ||||||
| ROA, Competitors2 | ||||||
| AbbVie Inc. | 7.88% | 3.07% | — | — | — | |
| Amgen Inc. | 9.63% | 11.54% | — | — | — | |
| Bristol-Myers Squibb Co. | 6.40% | -7.61% | — | — | — | |
| Danaher Corp. | 7.73% | 4.79% | — | — | — | |
| Eli Lilly & Co. | 11.44% | 13.28% | — | — | — | |
| Gilead Sciences Inc. | 9.16% | 0.18% | — | — | — | |
| Johnson & Johnson | 11.47% | 8.41% | — | — | — | |
| Merck & Co. Inc. | 12.35% | 7.72% | — | — | — | |
| Pfizer Inc. | 12.11% | 6.23% | — | — | — | |
| Regeneron Pharmaceuticals Inc. | 31.75% | 20.47% | — | — | — | |
| Thermo Fisher Scientific Inc. | 8.12% | 9.23% | — | — | — | |
| Vertex Pharmaceuticals Inc. | 17.44% | 23.07% | — | — | — | |
| ROA, Sector | ||||||
| Pharmaceuticals, Biotechnology & Life Sciences | 10.42% | 5.45% | — | — | — | |
| ROA, Industry | ||||||
| Health Care | 8.70% | 5.45% | — | — | — | |
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
ROA = 100 × Net income attributable to Biogen Inc. ÷ Total assets
= 100 × 1,556,100 ÷ 23,877,300 = 6.52%
2 Click competitor name to see calculations.
- Net Income Attributable to Biogen Inc.
- The net income exhibited a general upward trend from 2017 through 2019, rising from approximately 2.54 billion USD to nearly 5.89 billion USD. However, in 2020, net income decreased significantly to about 4.00 billion USD, followed by a further sharp decline to approximately 1.56 billion USD in 2021. This indicates a peak in profitability in 2019, succeeded by a substantial reduction over the subsequent two years.
- Total Assets
- Total assets increased steadily from around 23.65 billion USD in 2017 to roughly 27.23 billion USD in 2019. After 2019, total assets declined, reaching approximately 24.62 billion USD in 2020 and further decreasing to 23.88 billion USD in 2021. This pattern shows asset accumulation until 2019, followed by a contraction through 2021.
- Return on Assets (ROA)
- Return on assets improved from 10.73% in 2017 to a peak of 21.62% in 2019, reflecting enhanced efficiency and profitability relative to asset base during this period. Subsequently, ROA declined to 16.25% in 2020 and further to 6.52% in 2021, indicating a marked reduction in asset profitability in the latter years.
- Overall Analysis
- The company experienced growth in net income and asset base from 2017 through 2019, with corresponding improvements in return on assets suggesting increasing operational efficiency and profitability. From 2019 onward, both net income and total assets decreased, accompanied by a steep decline in ROA. This reverse trend highlights challenges in maintaining profitability and efficient utilization of assets. The steep fall in net income and ROA between 2020 and 2021 suggests significant operational or market difficulties impacting financial performance during this period.