Q2 2019 Earnings Call

Good morning, My name is Regina and I will be your conference operator today at this time I would like to welcome everyone to the Biogen second quarter 2019 financial results and business update.

Operator: All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during this time, simply press star then the number one on your telephone keypad. Please limit yourself to one question to allow other participants time for questions.

All lines have been placed on mute to prevent any background noise.

After the speakers remarks, there will be a question and answer session. If you would like to ask a question. During this time simply press Star then the number one on your telephone keypad. Please limit yourself to one question to allow other participants time for questions.

Operator: If you require any further follow-up, you may press star one again to rejoin the queue. Thank you. I would now like to turn the conference over to Biogen CEO, Michel Lunatsos. You may begin your conference.

If you require any further follow up you May press star one again to rejoin the queue.

Thank you I would now like to turn the conference over to Biogen CEO , Michelle do not so Sir you may begin your conference.

Michel Vounatsos: Thank you. Good morning, everyone, and thank you for joining us. I would like to start by thanking Matt Callistri for nearly four years he spent leading our investor relations program. We wish him the very best in his next endeavor. I would like to welcome Joe Marra, our new Vice President and Head of Investor Relations, who is a talented and energized finance and business leader with over 12 years of experience at Biogen across a number of functions. I am confident that Joe will prove to be a valuable resource for the investment community, and I look forward to all of you getting to know Joe. Joe, the floor is yours. Thank you, and welcome.

Thank you good morning, everyone and thank you for joining us I would like to start by thanking my 'cause history for maybe four years. He spent leading our investor relations pull government.

We wish him the very best in his next endeavor.

I would like to welcome Joe Mara I wouldn't you Vice President and head of Investor Relations Who's a talented and energized finance and business leader with over 12 years of experience at Biogen across a number of functions I am confident that Joel will prove to be valuable resource for the investment community and I look forward to all of you getting to know Joel Joel the floor is yours.

Thank you me some.

Joe Marra: Thank you, Michelle, and welcome everyone to Biogen's second quarter 2019 earnings conference call. I look forward to getting to know all of you over the coming months.

Thank you Michelle and welcome everyone to Biogen second quarter 2019 earnings Conference call I look forward to getting to know all of you over the coming months.

Joe Marra: Before we begin, I encourage everyone to go to the Investor section of Biogen.com to find the earnings release and related financial tables, including a reconciliation of the GAAP to non-GAAP financial measures that we will discuss today. Our GAAP financials are provided in Tables 1 and 2, and Table 3 includes a reconciliation of our GAAP to non-GAAP financial results. We believe non-GAAP financial results better represent the ongoing economics of our business and reflect how we manage the business internally.

Before we begin I encourage everyone to go to the investors section of Biogen Dotcom find the earnings release and related financial tables, including a reconciliation of the GAAP to non-GAAP financial measures that we'll discuss today are GAAP financials are provided in tables, one and two and table. Three includes a reconciliation of our GAAP to non-GAAP financial results. We believe non-GAAP financial results better represent the ongoing economics of our business and reflect how we manage the business internally. We have also posted slides on our website that follow the discussions related to this call.

Joe Marra: We have also posted slides on our website that follow the discussions related to this call. I would like to point out that we will be making forward-looking statements, which are based on our current expectations and beliefs. These statements are subject to certain risks and uncertainties, and our actual results may differ materially. I encourage you to consult the risk factors discussed in our SEC filings for additional details. On today's call, I am joined by our Chief Executive Officer, Michel Vounatsos, Dr. Michael Ehlers, EVP of Research and Development, and our CFO, Geoff Capello. We will also be joined for the Q&A portion of the call by our Chief Medical Officer, Dr. Al Sandrock. Now, I will turn the call back over to Michel. Thank you, Joe.

I would like to point out that we will be making forward looking statements, which are based on our current expectations and beliefs. These statements are subject to certain risks and uncertainties and our actual results may differ materially I encourage you to consult the risk factors discussed in our SEC filings for additional detail.

On today's call I'm joined by our Chief Executive Officer, Shelby Naxos, Dr., Michael Taylor's SVP of research and development and our CFO , Jeff Capello.

We will also be joined for the Q and a portion of the call by our Chief Medical Officer Dr. Al Sandrock, now I will turn the call back over to Michelle.

Thank you Joe.

Michel Vounatsos: Now, let me begin with some financial highlights. Compared to the same period a year ago, Biogen delivered solid top line and bottom line growth. Second quarter revenues grew 8% to $3.6 billion, and second quarter GAAP earnings per share grew 88% to $7.85. And non-GAAP EPS grew 58% to $9.15. Based on our strong performance year to date and our updated outlook for the second half of the year, we are raising our full year financial guidance, which Geoff will discuss in more detail. Now, let me review the highlights from the second quarter.

Now, let me begin with some financial highlights.

Compared to the same period, a year ago, Biogen delivered solid topline and bottom line growth.

Second quarter revenues grew 8% to $3.6 billion.

Second quarter GAAP earnings per share grew 88% to $7.85 and non-GAAP EPS grew 58% to $9.15.

Based on our strong performance year to date and how would they did the outlook for the second half of the year, we are raising our full year financial guidance, which Jeff will discuss in more details.

Now, let me review the highlights from the second quarter.

Michel Vounatsos: First, revenues from our MS core business, including Ocrevus royalties, increased 3% versus the prior year to $2.4 billion. Excluding Ocrevus, the total number of patients on our MS products globally grew in the low single digits versus the prior year. Critically, we are focused on addressing the IP challenge with Tecfidera, while also preparing for the expected launch of Umerity towards the end of the year. Second, Spinraza Global Revenues grew 15% to $488 million, driven by year-over-year revenue growth both in the U.S. and outside the U.S. The number of commercial patients on Spinraza increased by approximately 12% from last quarter, and we now have approximately 8,400 patients on Spinraza, including the expanded access program and clinical trials. Within the U.S., the number of Spinraza patients increased by approximately 4% versus Q1, which we believe demonstrates the potential for continued patient growth in the more mature markets. We were very proud to announce new data for the Neutral Study of Spinoaza.

First revenues from our M.S. core business, including all Christmas while you have to use increased 3% to virtusa, probably your two $2.4 billion.

Excluding go Craig is the total number of patients on our MSS products Nobody grew in the low single digits versus the prior year.

Critically we are focused on addressing the IP challenge we decreased era, while also preparing for the expected launch of you may recall the towards the end of the year.

Second Spinraza global revenues grew 15% to $488 million driven by year over year revenue growth both in the us and outside the us.

The number of commercial patients on Spinraza increased by approximately 12% from last quarter and we now have approximately 8400 patients on spinraza, including the expanded access program and clinical trials.

Within the U.S. the number of Spinraza patients increased by approximately 4% versus Q1, which we believe demonstrates the potential for continued patient growth in the more mature markets.

We were very proud to announce new data for the neutral study of Spinraza. We have continued to generate long term data across a broad patient populations, which underscore the compelling safety and efficacy profile of Spinraza.

Michel Vounatsos: We have continued to generate long-term data across broad patient populations that underscore the compelling safety and efficacy profile of Spinoaza. However, many are focused on the potential of new competition for Spinraza. While we welcome new options for patients, we believe it is premature to make assumptions about the ultimate uptake of emerging modalities given the large number of outstanding questions about their clinical profiles. Importantly, Spinraza remains the only SMA therapy approved for all age groups.

Many are focused on the potential of new competition for Spinraza why do we welcome your options for patients. We believe it is premature to make assumptions about the estimate uptake of emerging modalities given the large number of outstanding questions on the clinical profiles.

Importantly.

Sorry, Spinraza remains the only SMB therapy approved for all age groups.

Michel Vounatsos: [inaudible] Third, our biosimilars revenue grew 45% year-over-year to $184 million. We continue to deliver on our broad portfolio of anti-TNFs, including the strong launch of Imhaldi, the market-leading biosimilar referencing EMIRA in Europe. We estimate that the uptake of our biosimilars products will contribute up to 1.8 billion euros in healthcare savings across Europe in 2019, an important contribution to the long-term sustainability of the European healthcare system that Biogen is proud to contribute to.

Third I would that you'll see me does revenue grew 45% year over year to $184 million.

We continue to deliver on our broad portfolio of anti TNS, including the strong launch of him Harvey the market, leading biosimilar referencing emirati in Europe .

We estimate that the uptake of how about your stimulus products will contribute up to 1.8 billion euros in healthcare savings across Europe in 2019.

An important contribution to the long term sustainability of European healthcare systems that Biogen is proud to contribute to.

Michel Vounatsos: We believe this business continues to demonstrate a strong trajectory with the potential to continue to drive growth. Fourth, we make continuous progress to develop and expand our pipeline as we work to build a multi-franchise portfolio. We added four clinical programs to our pipeline this quarter, including the two mid- to late-stage ophthalmology gene therapy programs we acquired through Nightstar and also an oral BTK for MS and an oral compound for sporadic ALS.

We believe this business continues to demonstrate a strong trajectory with the potential to continue to drive growth.

Fourth we made continued progress to develop and expand our pipeline as we work to build a multi franchise portfolio.

We added four clinical programs slowed pipeline this quarter, including the two mid to late stage of kind of motor gene therapy to poke homes, we acquired through night Star.

Also an oral BTK for emmis and an oral compound for squad UK Ellis.

Michel Vounatsos: In total, we have added 17 clinical programs over the past two and a half years, as we have materially expanded and diversified our pipeline, which now includes 27 clinical programs. Mike will provide more details on the progress across our entire pipeline. Fifth, we maintain our diligent focus on capital allocation to maximize potential shorter returns. During the second quarter, we generated $2 billion in cash flow from operations, and we benefited from the expiration of the contingent payments related to Tecfidera. In the second quarter, we repurchased approximately 10.4 million shares at an average price of $231 per share for a total of $2.4 billion.

In total we have added 17 clinical program over the past two and a half years as we have methodically expanded and diversified our pipeline, which now includes 27 clinical programs.

Mike will provide more details on the development across our entire pipeline.

Steve.

We maintain our diligent focus on capital allocation to maximize potential show the returns.

During the second quarter, we generated $2 billion in cash flow from operations and we benefited from the expiration of the contingent payments related to treat era.

In the second quarter, we repurchased approximately 10.4 million shares at an average price of $231 per share for a total of $2.4 billion.

Michel Vounatsos: As we have stated previously, we view share repurchase as an important element of thoughtful and value-creating capital allocation. But at the same time, we have the financial flexibility and capacity to continue to evaluate potential external business development and M&A opportunities, as evidenced by the 11 deals we have executed over the past two and a half years, including our recent acquisition of Nightstar. As we have demonstrated, we are committed to maximizing returns for our shareholders while continuing to bring innovative therapies to patients, something that demands a thoughtful approach to all our investments over both the short and the long term. In summary, Biogen continued to execute on our strategic objectives. We delivered solid financial results, raised our full year 2019 financial guidance, continued to progress our pipeline, and were opportunistic and disciplined with the capital allocation. Our core MS business demonstrated resilience and delivered an all-time high quarterly revenue.

As we have stated previously we view share repurchase as an important element of thoughtful and value creating capital location.

But at the same time, we have the financial flexibility and capacity to continue to evaluate potential external business development and M&A opportunities as evidenced by 11 deals we executed over the past two and half years, including our recent acquisition of nine star.

As we have demonstrated we have committed to maximizing returns from pros shareholders, while continuing to bring innovative therapies to patients something that demand is thoughtful approach towards all our investments over both the short and the long term.

In summary, Biogen continue to execute on our strategic objectives, we delivered solid financial results raised our full year 2019 financial guidance continued to progress our pipeline and were opportunistic and disciplined with our capital allocation.

Our core MSC business demonstrated resilience and delivered an all time high quarterly revenues.

Michel Vounatsos: Spinraza continued to grow in key markets, including mature markets such as the U.S., and we presented compelling new data for the NUTRIO study. We grew our biosimilars business, driven by the strong launch of Imraldo. We added four new clinical programs to our pipeline, and we generated significant cash as we focused on strategically allocating capital towards the areas we believe have the highest potential return. Before I conclude, I would like to discuss how Biogen is evolving its strategy to drive long-term growth. Together with our Board of Directors, we have reflected on the opportunities before us, and we continue to believe that a core focus on neuroscience will lead to long-term shareholder value creation based on the large and growing epidemiology, breaking science, and our deep neuroscience expertise and core capabilities. With that said, we are refining the five strategic priorities we outlined two years ago. Our overarching goals are to enhance our focus on our current commercial business and accelerate the areas with the most attractive opportunities to build new franchises.

Spinraza continued to grow in key markets, including mature markets, such as the us and we presented compelling new data for the neutral study.

We grew our Biosimilars business driven by strong launch of human values. We added four new clinical programs. So a pipeline and we generated significant cash as we focus on strategic strategically allocating capital towards the areas. We believe have the highest potential return.

Before I conclude I would like to discuss how biogen is evolving its cottages to drive long term growth.

Together with our board of directors, we have reflected on the opportunities before us and we continue to believe that a core focus on neuro science will lead to long term shareholder value creation based on the large and growing epidemiology, breaking science and our deep neuro science expertise and core capabilities. We that said we are refining the five strategic priorities, we outlined two years ago.

Our overarching goals are to enhance our focus on our current commercial business.

Accelerate DRA as we the most attractive opportunities to build new franchises.

Michel Vounatsos: Rebalance the risk-reward profile of our pipeline and prioritize our investment based on clinical data. And widen our lens to new therapeutic areas. However, our first priority remains unchanged, to maintain long-term leadership in MS and maximize the resilience of that franchise. Our second priority is to build out a broader leading franchise in neuromuscular disorders. We aim to build on SpinRasa as the most successful rare disease launch ever. As we pursue multiple potential therapies for ALS, as well as a muscle strengthening program with potential applicability across a broad range of neuromuscular diseases, we have reported very encouraging results for TOFERSTEN in SOD1-ALS, and we believe this has positive implications for our broader portfolio targeting other forms of the disease.

Rebalance the risk reward profile of our pipeline prioritize our investment based on clinical data and widen our lance to need to have the details.

Our first priority remains and change to maintain long term leadership in a mess and maximize the resilience of that franchise.

Our second priority is to build out a broader leading franchise in the Amish could out these orders.

We aim to be done spinraza as the most successful rare disease launch ever.

As we pursue multiple potential therapies for LLS as well as in muscle strengthening program with potential applicability across a broader range of neuromuscular diseases.

Michel Vounatsos: Our third priority is to continue developing and expanding our neuroscience portfolio while now also widening our lens to selectively follow the science into therapeutic adjacencies, including immunology. Mike will provide more details on our strategy for R&D. Our fourth priority is to unlock the potential of biosimilars as a continued growth driver as we work to create financial headroom for innovation in the healthcare system. We aim to both increase the size of our biosimilars portfolio and expand geography. And fifth, in parallel, we will continue to drive efficiencies, including adopting digitalization in our operating model through continuous improvement, and we will be diligent in capital allocation as we aim to maximize returns for shareholders. We believe these priorities reflect both the recent progress we've made and the most attractive opportunities ahead of us.

We have reported a very encouraging results photofrin in Esso D. One HLS and we believe this has a positive indication for our broader portfolio targeting other form of the disease.

Our third priority is to continue developing and expanding our neuroscience portfolio. While now also widening our lance to selectively follow the science into the hepatic adjacencies, including immunology.

Mike will provide more details on our strategy in R&D.

Michel Vounatsos: We are working diligently to rebalance the risk profile of our pipeline, leading us to prioritize the areas we believe have the greatest probability of success and highest potential return. Overall, Biogen's purpose remains the same. We aim to transform patients' lives by pioneering and leading neuroscience and therapeutic adjacency. I will now turn the call over to Mike for a more detailed update on our recent progress and long-term strategy in R&D. Thank you, Michelle.

Our fourth priority is to unlock the potential of Biosimilars as a continued growth driver as we work to create financial headroom for innovation in the healthcare system. We aim to both increase the size of our Biosimilars portfolio.

And expand geographically.

And ceased in parallel we will continue to drive efficiencies, including adopting digitalization in our operating model through continuous improvement and we will be diligent in capital allocation as we aim to maximize returns for shareholders.

Michel Vounatsos: Thank you, Michel, and good morning, everyone. We are very pleased with the progress in our industry-leading neuroscience pipeline and with our expanding efforts in immunology. Illustrating the momentum in our portfolio, we look forward to 10 mid-to-late stage readouts over the next 18 months. As Michelle mentioned, our top priorities are to continue strengthening our franchises in MS and neuromuscular disorders. Beyond these priorities, we are refining the emphasis within our core and emerging areas.

We believe these priorities reflect both the recent progress we've made and the most attractive opportunities ahead of us.

We are working diligently to rebalance the risk profile of our pipeline, leading us to prioritize the areas. We believe have the greatest probability of success and highest potential return.

Dr. Michael Ehlers: To that end, based on the opportunities we see following our acquisition of Nightstar Therapeutics, we now view ophthalmology as a core growth area. Moreover, recognizing the potential of our existing assets and long-standing expertise in immunology, we now consider this to be an emerging growth area. Diving in, let me begin with advances we made in the second quarter to secure long-term scientific leadership in our MS and neuromuscular franchise. At the annual meetings of the American Academy of Neurology and the Consortium of Multiple Sclerosis Centers, we presented new interim data from EVOLVE-MS-1, an ongoing, single-arm, open-label, two-year Phase III study evaluating the safety and efficacy of duroxymal fumarate, The mean number of gadolinium-enhancing lesions in patients treated with duroxymethomerate was reduced by 77% compared to baseline in the total population and by 96% in newly diagnosed patients. Over one year, the rate of gastrointestinal adverse events leading to discontinuation was 0.7%.

Overhaul biogen's purpose remains the same we aim to transform patients lives by pioneering and leading neuroscience and to hepatic adjacencies.

I will now turn the call over to Mike for a more detailed update on our recent progress and long term strategy in RMB.

Thank you Michelle and good morning, everyone.

We are very pleased with the progress in our industry, leading neuroscience pipeline and with our expanding efforts in immunology.

Illustrating the momentum in our portfolio, we look forward to 10 mid to late stage Readouts over the next 18 months.

As Michelle mentioned, our top priorities are to continue strengthening our franchises in MMS and neuromuscular disorders.

Beyond these priorities, we are refining the emphasis within our core and emerging areas to that end based on the opportunities. We see following our acquisition of night Star Therapeutics. We now have you ophthalmology as a core growth area.

Moreover, recognizing the potential of our existing assets and longstanding expertise in immunology. We now consider this to be an emerging growth area.

Diving in let me begin with advances we made in the second quarter to secure long term scientific leadership in our Mds in neuromuscular franchises.

At the annual meetings of the American Academy of Neurology, and the consortium of multiple sclerosis centers, we presented new interim data from evolve MSS won an ongoing single arm open label two year phase three study evaluating the safety and efficacy of directional fume rate to be marketed as parity if approved by the FDA in patients with relapsing Remitting Ms.

Dr. Michael Ehlers: GI tolerability of duroxylifumerate versus Tecvidera is being evaluated in the ongoing EVOLVE-MS2 study. This study is now near completion, and we expect results in the coming weeks. I am also pleased to announce that we have dosed the first subject in the Phase I study of BIB-91, a highly potent and selective small molecule inhibitor of Bruton's tyrosine kinase, or BTK. BTK is a non-receptor tyrosine kinase that regulates the development and signaling of B-cells and myeloid cells that are hypo Notably, BIV-91 is a non-covalent inhibitor of BTK, which we believe, together with its high potency and selectivity, has a potentially best-in-class profile.

Interim results in 696 Amis patient showed that treatment with directional fume rate was associated with a 79% reduction in annualized relapse rate over one year when compared to baseline.

With an 83% reduction in newly diagnosed patients.

The mean number of gadolinium enhancing lesions in patients treated with Rexam accumulate was reduced by 77% compared to baseline in the total population.

And by 96% in newly diagnosed patients.

Over one year the rate of gastrointestinal adverse events, leading the discontinuation was 0.7%.

GI tolerability of directional fume rate versus tech for Dara is being evaluated in the ongoing evolve emmis to study.

This study is now near completion and we expect results in the coming weeks.

Dr. Michael Ehlers: This placebo-controlled, single- and multiple-ascending-dose study will evaluate the safety, tolerability, pharmacokinetics, and pharmacodynamics of BID-91 in healthy adults. Now, turning to our progress in neuromuscular disorder. At the Cure SMA Annual Conference, the 5th Congress of the European Academy of Neurology, we presented new interim data from the NURTURE study of Spinraza in pre-symptomatic infants with SMA. Now including up to 45 months of analysis, this ongoing open-label study once again highlighted the remarkable efficacy profile of Spinraza. Specifically, of the 25 pre-symptomatic patients with SMA treated with Spinraza in this study, 100% were alive, none required tracheostomy or permanent ventilation, 100% were sitting independently, and 92% were walking independently or with assistance. In addition, patients were approaching the maximum score of 64 on the CHOP Intend measure of motor function. At the last visit, patients with 3 SMN2 copies achieved a mean score of 63.4 out of 64, and patients with two SMN2 copies achieved a mean score of 62.1 out of 64. Importantly, these data also showed that the overwhelming majority of patients had achieved these motor milestones within the time frame of normal development.

I'm also pleased to announce that we have dosed the first subject in the phase one study of 91.

Our highly potent and selective small molecule inhibitor of routines tyrosine kinase or BTK.

Indicators and non receptor tyrosine kinase that regulates the development and signaling a b cells in myeloid cells that are hypothesize to contribute to the pathogenesis of MMS.

Notably did 91 is a non covalent inhibitor of BTK, which we believe together with its high potency and selectivity as a potentially best in class profile.

This placebo controlled single and multiple ascending dose study will evaluate the safety Tolerability pharmacokinetics and pharmacodynamics of bid 91 in healthy adults.

Turning to our progress in neuromuscular disorders.

At the cure SDMA annual conference in the fifth Congress of the European Academy of Neurology, We presented new interim data from the nurture study of Spinraza and Presymptomatic infants with SDMA.

Now, including up to 45 months of analysis. This ongoing open label study once again highlighted the remarkable efficacy profile of Spinraza.

Specifically of the 25 pre symptomatic patients with SDMA treated with Spinraza in this study 100% worldwide.

None required tricky ostomy or permanent ventilation.

100%, we're sitting independently.

And 92% were walking independently or with assistance.

In addition patients were approaching the maximum score of 64 on the chop intend to measure of motor function.

At last visit patients with three ASM into copies achieved a mean score of 63.4 out of 64.

Dr. Michael Ehlers: Given the robust, durable efficacy of SPINRAWS across a broad range of SMA patients, its well-established longer-term safety profile with a reversible, targeted mechanism of action, and unsurpassed real-world experience, we believe SPINRAWS will remain a foundation of care in SMA for years to come. Moreover, we believe Spinraza demonstrates the transformative potential of antisense oligonucleotide We are excited by the depth of our ASO pipeline targeting the genetic underpinnings of a range of neurological diseases, such as ALS. Specifically, as we described during our recent ALS webcast, we are targeting genetic forms of ALS where modulation of the genetic target is causally linked to disease. For instance, we continue to advance the Phase III VALOR study of tofurcin, an antisense oligonucleotide designed to degrade SOD1 mRNA and SOD1 ALS.

And patients with two SM into copies achieved a mean score of 62.1 out of 64.

Importantly, these data also showed that the overwhelming majority of patients had achieved these motor milestones within the timeframe of normal development.

Given the robust durable efficacy of spinraza across a broad range of estimated patients. It's well established longer term safety profile with a reversible targeted mechanism of action and unsurpassed real world experience. We believe Spinraza will remain a foundation of care and SDMA for years to come.

Moreover, we believe that Spinraza demonstrates the transformative potential of antisense oligonucleotides therapies to dramatically alter the course of diseases of the nervous system.

We are excited by the depth of our Ace who pipeline targeting the genetic underpinnings of a range of neurological diseases such as Npls.

Specifically as we described during our recent analyst webcast. We are targeting genetic forms of LSW, where modulation of the genetic target is causally linked to disease.

For instance, we continue to advance the phase III Valor study of two person and antisense oligonucleotides designed to degrade so the one M&A and SD Wan Mpls.

Dr. Michael Ehlers: We believe that this study has the potential to support registration for this devastating genetic form of ALS. We have now finalized the Phase III study design, which includes 99 patients treated with 100 mg tofurcin or placebo. Over the course of this 28-week study, patients will receive three loading doses over the first 29 days, followed by maintenance doses every four weeks.

We believe that this study has the potential to support registration for this devastating genetic form of Alice.

We have now finalized the phase three study design, which includes 99 patients treated with 100 milligram two first one or placebo.

Over the course of this 20 weeks 28 week study patients will receive three loading doses over the first 29 days followed by maintenance doses every four weeks.

Dr. Michael Ehlers: Based on the final Phase 3 study design, we expect a readout from this study in 2021. We also continue to advance the Phase I study of BIP-78, an antisense oligonucleotide targeting hexonucleotide repeat expansions in C9-ORF72, the most common genetic cause of ALS. Data from this study are also expected in 2021.

Based on the final phase three study design, we expect to readout from this study in 2021.

We also continue to advance the phase one study of Bibs, 78, and antisense oligonucleotides targeting hex and nucleotide repeat expansions in cnine or 72, the most common genetic cause of npls.

Dr. Michael Ehlers: Further, we are pursuing novel, scientifically driven drug targets for the larger opportunity in sporadic ALS. To this end, I am pleased to announce that the first patient was dosed in the Phase 1 study of B.I.B.100, a small molecule inhibitor of Xportin-1 or XPO-1, a nuclear transport factor that mediates the export of many proteins from the cell nucleus to the cytoplasm last month.

Data from this study are also expected in 2021.

Further we are pursuing novel scientifically driven drug targets for the larger opportunity and sporadic LLS.

To this end I am pleased to announce that the first patient was dosed in the phase one study of dip 100 for sporadic LLS last month.

Good 100 is a small molecule inhibitor of Exportin, one we're expo one a nuclear transport factor that mediates the export of many proteins from the cell nucleus to decide upon.

Dr. Michael Ehlers: With BIB100, we aim to test the hypothesis that reducing nuclear protein export may prevent the formation of neuronal cytoplasmic inclusions and thereby slow the clinical progression of sporadic ALS. In movement disorders, the Phase II study of our anti-tau antibody BIP92, or gosiranumab, in progressive supernuclear palsy is fully enrolled, with data expected in the second half of this year We believe that positive data from this study could potentially support a regulatory filing. Also this quarter, we completed enrollment in the Phase II study of BIP54, a monoclonal antibody. Parkinson's disease is the second most common neurodegenerative disorder with a prevalence of approximately 3 million patients across the G7 and no available treatment to slow its inexorable progression. Aggregation of misfolded alpha-synuclein and degeneration of nigrostriatal dopaminergic neurons.

With Big 100, we aim to test the hypothesis that reducing nuclear protein export may prevent the formation of neuronal cytoplasmic inclusions and thereby slow the clinical progression of sporadic LLS.

In movement disorders. The phase two study of our anti Tau antibody did 92 or go Serrana Mab and progressive Super nuclear policy is fully enrolled with data expected in the second half of this year.

We believe the positive data from this study could potentially support a regulatory filing.

Also this quarter, we completed enrollment of the phase two study of the 54, a monoclonal antibody targeting extra cellular alpha synuclein for Parkinsons disease.

Parkinson's disease is the second most common neurodegenerative disorder with a prevalence of approximately 3 million patients across the G. Seven and no available treatment to slow its inexorable progression.

Aggregation of Misfolded office, I nuclear and the generation of Niagara Steroidal dopaminergic neurons represent hallmark technologies of disease and genetic data from familial Parkinson's disease show that Alpha Synuclein can play a causal role in Parkinson's disease path Genesis.

Dr. Michael Ehlers: Alpha-synuclein can play a causal role in Parkinson's disease pathogenesis. In the second half of next year, we expect to receive data from the one-year placebo-controlled period of this study. This will include safety data as well as a neuroimaging-based assessment of striatal dopaminergic transporter density. Beyond BIV-54, we expect to advance up to two new antisense oligonucleotide programs for Parkinson's disease into the clinic by the end of the year, and in Alzheimer's disease and dementia. This quarter, our collaboration partner ACI did the first patient in the phase three study of BAN2401 for early Alzheimer's disease and continued to advance the phase three study for Ellenbessestad, also for early Alzheimer's. In parallel, we continue to advance our portfolio of Tau-directed therapeutics, including Gosiranumab in Phase 2, BIV-76, a distinct anti-Tau antibody in Phase 1, and BIV-80 Further, we are advancing a suite of next-generation pre-clinical programs pursuing genetically validated targets for defined subsets of Alzheimer's disease and dementia patients. Moving to Neurocognition, we continue to advance the Phase 2B study of BIB104 for the treatment of cognitive impairment associated with schizophrenia.

In the second half of next year, we expect to receive data from the one year placebo controlled period of the study. This will include safety data as well as a neuro imaging based assessment of steroidal dopaminergic transporter density.

Beyond 54, we expect to advance up to two new antisense oligonucleotides programs for Parkinsons disease into the clinic by the end of the year.

And in Alzheimer's disease in dementia this quarter, our collaboration partner a side dose the first patient in the phase III study of band two 401 for early Alzheimer's disease and continued to advance the phase three study for L. Investor also for early Alzheimer's disease.

In parallel we continue to advance our portfolio of tower directed therapeutics, including goes Serrana Mab in phase two the 76 distinct anti Tau antibody in phase, one and did 80 and antisense oligonucleotides targeting to how M&A currently in phase one being developed in collaboration with Ionis Pharmaceuticals.

Further we are advancing a suite of next generation preclinical programs pursuing genetically validated targets for defined subsets of Alzheimer's disease and dementia patients.

Moving to neuro cognition, we continue to advance the phase Twob study of bid one or four for the treatment of cognitive impairment associated with schizophrenia.

Dr. Michael Ehlers: Last month, the FDA granted fast-track designation to BIP-104 for this indication. BIP-104 is a first-in-class AMPA receptor potentiator that we believe has compelling data from a number of distinct early clinical studies. Data from this Phase 2B study are expected in late 2020. As I mentioned earlier, we view immunology as an emerging growth area for Biogen that takes advantage of our long-standing in-house expertise in this area. This quarter, we completed enrollment in the Phase II study of BIP59, a humanized monoclonal antibody that binds BDCA2 for cutaneous lupus erythematosus, or CLE, and systemic lupus erythematosus, or SLE. As shown in the Phase I study of BIP-59 recently published in the Journal of Clinical Investigation, treatment with BIP-59 led to With limited available treatment options and a prevalence of approximately 800,000 patients across the G7, we aim to bring forward a potentially new disease-modifying therapy to this area of high unmet need. Data from this study are expected by the end of this year.

Last month, the FDA granted fast track designation to build one of four for this indication.

Good window for is a first in class Amp receptor Potentiator that we believe has compelling data from a number of distinct early clinical studies.

Data from this phase Twob study are expected in late 2020.

As I mentioned earlier, we view immunology as an emerging growth area for Biogen that takes advantage of our long standing in house expertise in this area.

This quarter, we completed enrollment of the phase two study of the 59, a humanized monoclonal antibody that binds BDCA too for cutaneous lupus erythematosus, or sealy and systemic lupus erythematosus or silly.

As shown in the Phase one study of did 59 recently published in the journal of clinical investigation treatment with did 59 led the BDC to internalization on plasma side to a dendritic cells as well as decrease interferon pathway activation reduced immune infiltrates in skin lesions and decreased cutaneous disease activity in patients with esselte and Sealy.

With limited available treatment options and a prevalence of approximately 800000 patients across the G. Seven we aim to bring forward a potentially new disease modifying therapy to this area of high unmet need it.

Data from this study are expected by the end of this year.

Dr. Michael Ehlers: In collaboration with UCB, we plan to initiate a Phase III program in the first half of next year for Daprolizumab Pegol, an anti-CD40 ligand-pegolated fab, in patients with active SLE despite standard of care treatment. This decision is based on the promising results of the Phase 2B clinical trial. Interim data from this study were presented at the European Congress of Rheumatology last month.

Further in collaboration with you Seabee, we plan to initiate a phase three program with the in the first half of next year for dapper limit payroll and anti CD 40 ligand pegylated fab in patients with active esselte despite standard of care treatment.

This decision is based on the promising results of the phase Twob clinical trial.

Interim data from this study were presented at the European Congress of Rheumatology last month.

Dr. Michael Ehlers: As part of the ongoing process of balancing risk and opportunity within our pipeline, we continue to strategically prioritize our programs and disease areas. To that end, we have decided not to initiate the Phase 3 trials for Vixotra gene, or BIP-74, in trigeminal neuralgia this year, although we will continue with Phase 3 preparation activities in advance of a potential initiation next year. We will continue to evaluate our trigeminal neuralgia program, and we will assess potential initiation of phase 3 studies next year. We continue to advance a Phase II study of Vicks Autrogene in small fiber neuropathy, and we now expect a readout from that study in 2021.

As part of the ongoing process of balancing risk and opportunity within our pipeline, we continue to strategically prioritize our programs and disease areas.

To that end, we have decided not to initiate the phase three trials for VIX Aurigene orbs, 74, and trigeminal neuralgia this year.

Although we will continue with phase III preparation activities in advance of a potential initiation next year.

We will continue to evaluate our trigeminal neuralgia program and we will assess potential initiation of phase three studies next year.

We continue to advance the phase two study of 600 units more fiber neuropathy and now expect to read out from that study in 2021.

Dr. Michael Ehlers: In addition, we continue to enroll the Phase III study of BIB-93 for the prevention and treatment of severe cerebral edema in patients with large hemispheric infarction, with a potential launch as early as 2022. We also expect a phase 2 readout of TMS007 for acute ischemic stroke by the end of next year. Emphasizing our focus on genetically validated targets and defined patient populations to rebalance pipeline risk, let me conclude by highlighting a recent acquisition of Nightstar Therapeutics.

In addition, we continue to enroll the phase three study of bid 93 for the prevention and treatment of severe cerebral edema in patients with large hemispheric infection with the potential launch as early as 2022.

We also expect to phase two readout of Tms zeros or seven in acute ischemic stroke by the end of next year.

Finally, emphasizing our focus on genetically validated targets in defined patient populations to rebalance pipeline risk.

Let me conclude by highlighting our recent acquisition of night Star Therapeutics.

Dr. Michael Ehlers: We are extremely excited to join forces with this talented team of drug developers to address serious genetic causes of blindness for which there are no current treatment options. This acquisition accelerates our entry into ophthalmology with the potential to deliver first-in-class gene therapies to patients suffering from severe retinal disease. Our lead drug candidate, NSRREP1, now known as BIB111, is an AAV-based gene therapy delivered by targeted subretinal injection for the treatment of choroideremia, a rare degenerative disease that inevitably leads to blindness for which there are no current therapies. In Phase 1-2 trials, treatment with B.I.B.1.11 via subretinal injection was associated with a higher rate of maintained vision and, in a subset of patients, a meaningful improvement in visual acuity, suggesting that B.I.B.1.11 has the potential to significantly alter the course of this disease.

We are extremely excited to join forces with this talented treat team of drug developers to address serious genetic causes of blindness for which there are no current treatment options.

This acquisition accelerates our entry into ophthalmology with the potential to deliver first in class gene therapies to patients suffering from severe retinal diseases.

Our lead drug candidate NSR Rep. One now known as bid 111 isn't Avi based gene therapy delivered by targeted sub retinal injection for the treatment of Choroideremia, a rare degenerative disease that inevitably leads to blindness for which there are no current therapies.

In phase one two trials treatment with big 111 via sub retinal injection was associated with a higher rate of maintain vision and in a subset of patients a meaningful improvement in visual acuity, suggesting that bid 111 has the potential to significantly alter the course of this disease.

Dr. Michael Ehlers: We expect data from the Phase 3 STAR trial of BIP-111 in the second half of next year. Our second clinical stage asset, NSR-RPGR, now known as BIB1-12, is an AAV-based gene therapy targeting X-linked retinitis pigmentosa, or XLRP. Like BIB111, BIB112 is delivered by targeted subretinal injection. Data from a Phase I-II dose escalation study showed promising signals of early efficacy, including increases in central retinal sensitivity as measured by micropyrametry. A Phase II-III dose expansion study of B.I.B.1.12 is currently enrolling, with data expected in the second half of next year. These diseases, which inevitably lead to blindness and the associated severe disability, are part of a larger set of inherited retinal diseases that have been estimated to afflict up to 200,000 patients in the U.S. alone that may be amenable to similar genetic medicine solutions.

We expect data from the phase three star trial of bid 111 in the second half of next year.

Our second clinical stage asset NSR RPG are now known as bid 112 isn't 80 based gene therapy targeting X linked retinitis pigmentosa or XL RP.

Like bid 111, 112 is delivered by targeted sub retinal injection.

Data from a phase one two dose escalation study showed promising signals of early efficacy, including increases in central retinal sensitivity as measured by Microperimetry.

Phase two three dose expansion study a bit 112 is currently enrolling with data expected in the second half of next year.

These diseases, which inevitably lead to blindness, and the associated severe disability or part of a larger set of inherited retinal diseases, which have been estimated to afflict up to 200000 patients in the us alone that may be amenable to similar genetic medicine solutions.

Dr. Michael Ehlers: We look forward to leveraging our newly acquired leading clinical platform in specialty ophthalmology to potentially expand future opportunities across inherited retinal disease. As Michelle mentioned, including our new Nightstar assets, we added four clinical programs to our pipeline this quarter. BIP-111 for choroideremia, BIP-112 for X-linked retinitis pigmentosa, BIP-91, a small molecule BTK inhibitor for MS, and BIP-100, a small molecule XPO1 inhibitor for sporadic ALS. In total, we have added 17 clinical programs over the past two and a half years as we have continued to expand our pipeline. And we expect to advance up to three additional programs into the clinic in the second half of this year, including up to two new antisense oligonucleotide programs for Parkinson's disease. As we widen our strategic lens, we will continue to mitigate risk by seeking later-stage assets, prioritizing targets that have been validated by human genetics, Deploying biomarkers in early stage clinical programs, and Leveraging Our Asymmetric Capabilities and Expertise in Neuroscience.

We look forward to leveraging our newly acquired leading clinical platform and specialty ophthalmology to potentially expand the future opportunity across inherited retinal diseases.

As Michelle mentioned, including our New night Star assets, we added four clinical programs to our pipeline. This quarter. The 111 for Kreuter EMEA did 112 for excellent written notice Pigmentosa did 91, a small molecule BTK inhibitor for Emmis and did 100, a small molecule XP one inhibitor for sporadic LSW.

In total we have added 17 clinical programs over the past two and a half years as we have continued to expand our pipeline and we expect to advance up to three additional programs into the clinic in the second half of this year, including up to two new antisense oligonucleotides programs for Parkinsons disease.

As we widened our strategic lens, we will continue to mitigate risk by seeking later stage assets prioritizing targets that have been validated by human genetics deploying biomarkers in early stage clinical programs and leveraging our asymmetric capabilities and expertise in neuroscience.

Dr. Michael Ehlers: With 10 mid- to late-stage readouts over the next 18 months, including 8 Phase II readouts, the Phase III readout of BIB111, and head-to-head data for Vumerity, we believe we are poised to reinforce our core franchises in MS and neuromuscular disorders, build further depth in our neuroscience portfolio, and follow the science into emerging areas. Above all, we remain focused on our goal of developing transformative medicines for I will now pass the call to Geoff.

With 10 mid to late stage Readouts over the next 18 months, including eight phase two read outs. The phase three readout of bid 111 and head to head data for humanity. We believe we are poised to reinforce our core franchises in Fms in neuromuscular disorders build further depth in our neuroscience portfolio and follow the science into emerging areas above all we remain focused on our goal of developing transformative medicines for patients living with devastating neurological diseases.

I will now pass the call to Jeff.

Geoff Meacham: Thanks, Mike. Good morning, everyone.

Thanks, Mike Good morning, everyone I'll now review, our financial performance for the second quarter 20019, starting with revenues.

Geoff Meacham: I'll now review our financial performance for the second quarter of 2019, starting with revenue. As Michelle mentioned earlier, we had a strong Q2 2019 from a revenue perspective. Total revenues for the second quarter grew 8% year-over-year to approximately $3.6 billion.

As Michelle mentioned earlier, we had a strong Q2 2019 from a revenue perspective total revenues for the second quarter grew 8% year over year to approximately $3.6 billion.

Geoff Meacham: Overall, our MS business delivered revenues of approximately $2.4 billion in the second quarter of 2019, including Ocrevus royalties of approximately $183 million, growing 3% versus the prior year. Global MS revenues in Q2 2019 were stable versus the prior year without Ocropus Royalty. U.S. MS revenues in Q2 2019 were impacted by a decrease in channel inventory of approximately $25 million, compared to a decrease of approximately $50 million in Q2 2018, and a decrease of approximately $175 million in Q1. In addition, this quarter, we benefited from lower than anticipated discounts and allowances, which is not expected to continue for the rest of the year.

Overall, our MSP business delivered revenues of approximately $2.4 billion in the second quarter 2019, including Opus royalties of approximately 183 million growing 3% versus the prior year.

Global Mis revenues in Q2, 2019 were stable versus the prior year without brokers royalties.

You SMS revenues in Q2 2019 were impacted by a decrease in channel inventory of approximately 25 million.

Compared to a decrease of approximately 50 million in Q2 2018.

And a decrease of approximately $175 million in Q1 2019.

In addition, this quarter, we benefited from lower than anticipated discounts and allowances, which is not expected to continue for the rest of the year.

Global second quarter Tech for their revenues increased 6% versus prior year, driven by revenue growth both in the us and outside the U.S.

Geoff Meacham: Global second quarter Tecfidera revenues increased 6% versus the prior year, driven by revenue growth both in the U.S. and outside the U.S. U.S. TECFDRA revenues were impacted by a decrease in channel inventory of approximately $10 million in the second quarter of 2019, compared to a decrease of approximately $40 million in Q2 2018, and a decrease of approximately $110 million in Q1 2019. We were pleased to see a continued increase in the share of new prescriptions protected there in the U.S., and for the second consecutive quarter, our share of new prescriptions exceeded our share of total prescriptions. Additionally,

U.S. Tech for their revenues were impacted by a decrease in channel inventory for approximately $10 million in the second quarter of 2019.

Compared to a decrease of approximately $40 million in Q2, 2018, and a decrease of approximately $110 million in Q1 2019.

We were pleased to see a continued increase in the share of new prescriptions projected here in the us and for the second consecutive quarter, our share of new prescriptions exceeded our share of total prescriptions.

Additionally.

Geoff Meacham: Our share of new prescriptions in the U.S. for tachydera is now at its highest point since the launch of Okra. Outside the U.S., Techvidere performed very well in Q2 2019, with continued volume increases across all large European markets and Japan versus the prior year, somewhat offset by pricing pressure in several European countries. In total, Tecfideri delivered strong global patient growth of approximately 8% year-over-year. However, Q2 global interferon revenues, including both Avonex and Plegrity, decreased 11% versus the second quarter of 2018 due to the continuing shift from injectable platforms to oral or high-efficacy therapies. Within the U.S., avanix and plagiarity were impacted by a decrease in channeled inventory of approximately 5 million.

Our share of new prescriptions in the US protective Tucker Dara is now at its highest point since the launch of brokers.

Outside the US Secretary performed very well in Q2 2019 with continued volume increases across all large European markets and Japan versus the prior year somewhat offset by pricing pressure in several European countries.

In total secretary delivered strong global patient growth of approximately 8% year over year.

Q2, global interferon revenues, including both Avnets integrity decreased 11% versus the second quarter 2018, due to the continuing shift from injectable platforms to oral or high efficacy therapies.

Within the us Avnets integrity were impacted by a decrease in channel inventory of approximately $5 million.

Geoff Meacham: Unknown Executive, Ami Fadia, Adam Keeney, Chris Schott, Biogen Inc. Outside the U.S., Interferon revenues benefited by approximately $10 million due to channel dynamics within Europe. Saudi Arabia's worldwide revenues increased 2% versus the second quarter of 2018. Within the U.S., salary revenues were impacted by a decrease in channel inventory of approximately $10 million compared to relatively stable levels in Q2 2018 and a decrease of approximately $15 million in Q1 2019.

Compared to a decrease of approximately 10 million in Q2, 2018, and a decrease of approximately $50 million in Q1 2019.

Outside the U.S. interfering revenues benefited by approximately 10 million.

Channel dynamics within Europe .

Discovery worldwide revenues increased 2% versus the second quarter of 2018.

Within the U.S. Sabri revenues were impacted by a decrease in channel inventory of approximately $10 million compared to relatively stable levels in Q2, 2018, and a decrease of approximately 15 15 million in Q1 2019.

Geoff Meacham: We were pleased to see stability in disability revenues in the U.S., along with growth outside the U.S. versus the prior year. We believe the recent launch of MazEnt has primarily impacted Jelenia so far, with minimal impact on Tecvida and Tysabri in the second quarter. Overall, we were pleased with the execution of our MS franchise and the strong performance of our MS business in the second quarter. We continue to be focused on maintaining resilience and MS market leadership. Let me now move on to Spinraza.

We were pleased to see stability into Sabri revenues in us along with growth outside the us versus the prior year.

We believe the recent launch amazement as primarily impacted Julia so far.

With minimal impact on tech leader and to celebrate in the second quarter.

Overall, we were pleased with the execution of RMS franchise, and the strong performance of our EMS business in the second quarter, we continued to be focused on maintaining resilience and market leadership.

Let me now move onto Spinraza.

Geoff Meacham: Global second quarter Spinraza revenues increased 15% versus the prior year to $488 million. In the U.S., revenues increased 12% versus the second quarter of 2018, and 3% versus Q1 2019, driven by continued patient growth, which we believe demonstrates that Spinraza has the potential for continued steady growth in larger, more mature markets. The number of patients on therapy in the U.S. increased 4% as compared to the end of the first quarter of 2019, since its approval in late May. We have not seen a meaningful impact from Zolgensma on Spinraza performance in the U.S. As a reminder, Zolgensma is only indicated for children under 2 years old, which represents approximately 5% of the prevalent mark.

Global second quarter spin Robert summarized it revenues increased 15% versus the prior year to $480 million.

In the U.S. revenues increased 12% versus the second quarter of 2018, and 3% versus Q1 2019, driven by continued patient growth, which we believe demonstrates that spinraza has the potential for continued steady growth in larger more mature markets.

The number of patients on therapy in the us increased 4% as compared to the end of the first quarter of 2019.

Since its approval in late May.

We have not seen a meaningful impact from Seoul, Jonsman on Spinraza performance and use as a reminder, so gen summit is only indicated for children under two years old which represents approximately 5% of the prevalent market.

Geoff Meacham: In the U.S., we continue to make strong progress with adults. In the second quarter, we were pleased to see that approximately 50% of new starts were adults. And the number of adult patients in the U.S. increased by approximately 7% versus the first quarter of 2019. We still believe there is a large opportunity remaining, as we have only reached approximately 20% of the adults in the U.S., and as a reminder, this is the largest patient segment, representing approximately 60% of the SMA market. In the U.S., the observed discontinuation rate is relatively low, currently in the mid-single digits on an annualized basis.

In the U.S., we continued to make strong progress with adults in the second quarter. We were pleased to see approximately 50% of new starts were adults and the number of adult patients in the us increased by approximately 7% versus the first quarter 2019.

We still believe there is a large opportunity remaining as we've only reach approximately 20% of the adults in the us and as a reminder, this is the largest patient segment, representing approximately 60% of the SMB market.

In the us the observed discontinuation rate is relatively low.

In the mid single digits on an annualized basis.

Geoff Meacham: Outside the U.S., revenues increased 19% for the second quarter of 2018, driven by continued new country launches and increased penetration across all major geographies. In total, outside the U.S., the number of commercial spina bifida patients increased approximately 17% versus the prior quarter. We recorded revenues from over 40 international markets in the second quarter. During the past quarter, we secured broad reimbursement in the UK, Ireland, and Argentina. As a reminder, we believe the global opportunity for Spinraza is significant and even greater than we had initially anticipated.

Outside the US revenues increased 19% for the second quarter of 2018, driven by continued new country launches and increased penetration across all major geographies.

In total outside the us the number of commercial spend resin patients increased approximately 17% versus the prior quarter.

We recorded revenues from over 40 international markets in the second quarter.

During the past quarter, we secured broad reimbursement in the UK, Ireland and Argentina.

As a reminder, we believe the global opportunity for Spinraza is significant and even greater than we had initially anticipated we have.

Geoff Meacham: We estimate that there are over 45,000 individuals with SMA in the markets where Biogen has a direct presence, including attractive markets in Asia Pacific and Latin America. Compared to Q1 2019, ex-U.S. revenues decreased 13%. As we previously mentioned on our last Earnings Call, Q1 revenues benefited from a positive pricing adjustment of $14 million in France and the timing of shipments across several international markets, which can be lumpy at times, affecting the quarter-over-quarter comparison. In the second quarter, ex-U.S. revenues were also impacted by the continued transition from loaning to maintenance doses in more mature markets.

Estimate that there are over 45000 individuals SDMA in the markets, where Biogen has a direct presence, including attractive markets in Asia Pacific and Latin America.

Versus Q1, 2019 ex us revenues decreased 13%.

As we previously mentioned on our last earnings call Q1 revenues benefited from a positive pricing adjustment of 14 million in France, and the timing of shipments across several international markets, which can be lumpy at times affecting the quarter over quarter comparison.

In the second quarter ex US revenues were also impacted by the continued transition from loading to maintenance doses in more mature markets.

Geoff Meacham: Although overall XUS revenues declined due to quarterly dynamics, we saw quarter-over-quarter patient growth in the mid-single digits across the larger, more mature European markets, as well as Japan, significant patient growth in Turkey, and strong double-digit patient growth across multiple markets in Asia-Pacific and Latin America. Overall, we were pleased to see continued patient growth across the larger mature markets and continued rapid uptake from more recently launched markets. Given our expected continued patient growth and execution across many global markets, our established product profile, and the significant market opportunity, we remain optimistic about our estimated business and its trajectory. Let me now move on to our biosimilars business, which generated $184 million this quarter, growing 45% versus the prior year. We estimate there are now over 170,000 patients using their biosimilars in Europe. Benapali has continued to grow in volume and market share across Europe, strengthening its leadership position in markets such as Germany, the UK, Norway, and Denmark. We are pleased to report that Benapali has now become the number one prescribed embryo biosimilar across the major EU5 markets.

Although overall ex us revenues declined due to quarterly dynamics.

Excuse me, we saw quarter over quarter patient growth in the mid single digits across the larger more mature European markets as well as Japan significant patient growth in Turkey, and strong double digit patient growth across multiple markets in Asia Pacific and Latin America.

Overall, we were pleased to see continued patient growth across the larger mature markets and continued rapid uptake for more recently launched markets.

Given our expected continued patient growth and the execution across many global markets, our established product profile and the significant market opportunity, we remain optimistic of our SMB business and its trajectory.

Let me now move onto our Biosimilars business, which generated 184 million this quarter growing 45% versus the prior year.

We estimate there are now over 170000 patients using our barrels summers in Europe .

Benepali has continued to grow in volume and market share across Europe strengthening its leadership position in markets, such as Germany, The UK, Norway and Denmark.

We were pleased to report that Benepali has now become the number one prescribed enbrel biosimilar across the major you five markets.

Geoff Meacham: Luxarby volume grew 96% versus the prior year. Emeraldi volumes grew 40% versus 44% versus Q1 2019, and it continues to be the leading Humira biosimilar launched across Europe. The Immorality Auto Injector has been well received in the market and continues to build on our success with Monopoly in offering an improved patient experience at a lower price. In a recent study comparing the Emeraldi auto-injector device with the Humira device, 85% of nurses and 78% of patients preferred the Emeraldi device.

But sotheby volume grew 96% versus the prior year.

And they were all the volumes grew 40% versus 44% first Q1 2018, and it continues to be the leading launched humira biosimilar across Europe .

The or all the auto injector has been well received in the market and continues to build on our success with Mt, Holly and offering and improved patient experience at a lower price point.

In a recent study comparing them or all the auto injector device with the mirror device, 85% of nurses and 78% of patients prefer the emerald the device.

Our bio Similars business, along with Spinraza helped drive geographic diversification of our revenue base. We aim to continue capitalizing on global growth opportunities for both our current commercial portfolio and our pipeline products.

Geoff Meacham: Our biosummiters business, along with Spinraza, has helped drive geographic diversification of our revenue base. We aim to continue capitalizing on global growth opportunities for both our current commercial portfolio and our pipeline products. Total NTCD 20 revenues in Q2 increased 18% versus the prior year, primarily driven by Okravis royalties. Q2 Ocrevus royalties benefited by approximately $17 million due to an adjustment related to prior periods. We continue to expect Rituxan revenues to be impacted by the entry of biosimilars in the U.S. beginning in the fourth quarter of this year. Total other revenues in the second quarter increased 47% versus the prior year. These revenues tend to be lumpy and difficult to predict.

Total anti CD 20 revenues in Q2 increased 18% versus the prior year, primarily driven by opus royalties.

Q2, opus royalties benefited by approximately $17 million due to an adjustment related to prior periods. We continue to expect rituxan revenues to be impacted by the entry barriers summerson us beginning in the fourth quarter of this year.

Total other revenues in the second quarter increased 47% versus the prior year. These revenues tend to be lumpy and difficult to predict.

Geoff Meacham: Let me now turn to gross margin performance. Q2 2019 Gross Margin was 87%, an improvement versus Q1 2019, following the sale of most of the remaining bioavailable inventory in the first quarter, which carried a very low gross margin. Q2 GAAP and non-GAAP R&D expense were both 13% of revenue. Q2 R&D benefited from savings related to EduKinemab as well as the timing of spend. As a reminder, the second quarter 2018 R&D expense included $324 million related to the upfront payment to Iona. Q2 GAAP RD expense also included an additional $162 million related to our equity investment in Iona. Q2 GAAP SG&A with 16% of revenue

Let me now turn to gross margin performance.

Q2, 2019 gross margin was 87% and improvement versus Q1 2019. Following the sale of most of the remaining burberry inventory in the first quarter, which carried a very low gross margin.

Q2, GAAP and non-GAAP R&D expense were both 13% of revenue.

Q2, R&D benefited from both savings related to educate them up as well as the timing of spend.

As a reminder, the second quarter 2018, R&D expense included 324 million related to the upfront payment toy on us.

Q2, GAAP R&D expense also included an additional $162 million related to our equity investment of illness.

Q2, GAAP estimate was 16% of revenue.

Geoff Meacham: and non-GAAP SG&A was 15% of revenue. The increase in GAAP SG&A expense versus the prior year was primarily due to approximately $33 million in acquisition-related charges incurred in connection with our recent acquisition of NYSE. Q2 GAF other expense was $197 million, including $174 million in net losses on investments, principally driven by a decrease in the fair value of our equity investment in IONOS, as well as a realized loss on the sale of IONOS stock versus the prior quarter. In Q2 2019, non-GAAP other expense was $19 million. In Q2, our GAAP and non-GAAP tax rates were both approximately 14%. During the second quarter, we completed a change to our tax profile. This resulted in a decrease of 500 basis points to our GAAP tax rate and a decrease of 430 basis points to our non-GAAP tax rate for the second quarter. This benefit is not expected to recur post-2019.

And non-GAAP EPS unit was 15% of revenue.

Susan.

The increase in GAAP question expense versus the prior year was primarily due to approximately $33 million and acquisition related charges incurred in connection with our recent acquisition of night Star.

Q2, GAAP other expense was $197 million, including 174 million in net losses on investments principally driven by a decrease in the fair value of our equity investment Aon us as well as a realized loss on the sale of iOS stock versus the prior quarter.

In Q2, 2019, non-GAAP other expense was $19 million.

In Q2, our GAAP and non-GAAP tax rate for both approximately 14%.

During the second quarter, we completed the change to our tax profile. This resulted in a decrease of 500 basis points to our GAAP tax rate and a decrease of 430 basis to our non-GAAP tax rate for the second quarter. This benefit is not expected to recur post 2019.

Geoff Meacham: We repurchased approximately 10.4 million shares in the second quarter at an average price of $231 for a total value of approximately $2.4 billion. Additionally, we completed our 2018 Share Repurchase Authorization. And as of the end of the second quarter, we had approximately $4.1 billion remaining in our 2019 authorization, which now brings us to diluted earnings per share. In the second quarter, we booked GAAP EPS of $7.85, an increase of 88% versus the prior year, and non-GAAP earnings of $9.15, a 58% increase versus the prior year. As a reminder, Q2 2018 GAAP and non-GAAP EPS were impacted by a total of $2.84 and $1.52, respectively, related to BD transactions affecting year-of-year comparisons. We generated approximately $2 billion of net cash flows from operations in the second quarter. In this quarter, the contingent payments related to Techvidare expired.

We repurchased approximately 10.4 million shares in the second quarter at an average price of $231 for a total value of approximately $2.4 billion.

We completed our 2018 share repurchase authorization.

And as of the end of the second quarter, we get approximately 4.1 billion remaining on our 2019 authorization.

Which now brings us to our diluted earnings per share.

In the second quarter, we booked GAAP EPS of $7.85, an increase of 88% versus the prior year and non-GAAP earnings of $9 and 15 15 cents, a 58% increase versus prior year. As a reminder, Q2 2018, GAAP and non-GAAP EPS were impacted by a total of $2.94 and $1.52, respectively related to BD transactions affecting year over year comparison.

We generated approximately 2 billion of net cash flows from operations in the second quarter and this quarter the contingent payments related detect for their expire.

Geoff Meacham: We ended the quarter with approximately $4.3 billion in cash and marketable securities and $5.9 billion in debt. So, let me now turn to our updated full-year guidance for 2019. We expect revenues of approximately $14 billion to $14.2 billion, which would represent year-over-year growth of approximately 4 to 6 percent, which is an increase from our initial guidance of 1 to 3 percent growth. This range is driven primarily by uncertainty in channel inventory levels in the U.S. at the end of the year. We anticipate GAAP and non-GAAP R&D expense between 15.5% and 16.5% of sales, a slight decrease from prior guidance. This reflects savings from the termination of the Phase 3 studies of Dukinimab, as well as additional operating expenses for the Nightstar programs we acquired.

We ended the quarter with approximately $4.3 billion in cash and marketable securities and $5.9 billion in debt.

Let me now turn to our updated full year guidance for 2019.

We expect revenues of approximately 14 billion to 14.2 billion, which would represent year over year growth of approximately 4% to 6%, which is an increase from our initial guidance of 1% to 3% growth. This range is driven primarily by uncertainty in channel inventory levels in the us at the end of the year.

We anticipate GAAP and non-GAAP R&D expense between 15.5% and 16% of sales a slight decrease from prior guidance. This reflects the savings from the termination of the phase three studies of new Kitimat as well as additional operating expenses for the night Star programs, we acquired.

We expect GAAP SGN expense to be approximately 16% to 17% of revenues and non-GAAP EPS in expense to be approximately 15.5% to 69% of revenues.

Geoff Meacham: We expect GAAP SG&A expense to be approximately 16 to 17% of revenues and non-GAAP SG&A expense to be approximately 15.5% to 16.5% of revenues. We expect our GAAP tax rate to be approximately 17-18% and our non-GAAP tax rate to be approximately 15.5% to 16.5%. We anticipate full-year GAAP diluted EPS of $29.60 to $30.40, representing growth of 37% to 41% versus 2018, and non-GAAP diluted EPS of $31.50 to $32.30, representing growth of 20% to 23%. Also, an increase versus prior. Of note, this guidance does not include any impact from potential acquisitions or large business development transactions, as both are hard to predict. I'll now turn the call back over to Michel for his closing comments.

We expect our GAAP tax rate to be approximately 17% to 18%.

And our non-GAAP tax rate to be approximately 15% to 16%.

We anticipate full year, GAAP diluted EPS of $29.60 to $30 and 40% $30.40 representing growth of 37% to 41% versus 2018, and non-GAAP diluted EPS to be $31.50 to $32.30 representing growth of 20% to 23% also an increase versus prior guidance of note. This guidance does not include any impact from to potential acquisitions or large business development transactions as both are hard to predict.

Ill now turn the call back over to Michel for his closing comments. Thank you, Jeff Biogen demonstrated strong execution this quarter and we continue to apply our world class capabilities and expertise to progress our pipeline all while maintaining a diligent focus on continuous improvement and strategic capital allocation.

Between now and the end of 2020 , We expect continued progress as we aim to be the multi franchise portfolio, including 10 meter two late stage data readout Amis PSP lupus epilepsy.

Michel Vounatsos: Thank you, Geoff. Biogen demonstrated strong commercial execution this quarter, and we continue to apply our world-class capabilities and expertise to progress our pipeline, all while maintaining a diligent focus on continuous improvement and strategic capital allocation. Between now and the end of 2020, we expect continued progress as we aim to build a multi-franchise portfolio, including 10 mid- to late-stage data readouts in MS, PSP, lupus, epilepsy, Parkinson's disease, cognitive impairment associated with schizophrenia, stroke, and ophthalmology, and potential regulatory approval in the U.S. for Umerity in MS. Finally, I want to reiterate our commitment to This demands that we continue to allocate capital efficiently, effectively, and appropriately. As we have demonstrated in the past, we will always strive to have an optimal capital structure as well as aim for superior returns from the investments we make.

Since disease cognitive impairment associated with schizophrenia stroke and extend motor G.

And potential regulatory approval in the U.S fully may be key NMS.

Finally, I want to hit rate that were commitment to maximizing returns to shareholders and bringing innovative therapies to patients over the long term. These demands that we continue to look at capital efficiently effectively and Apple pay at least as we have demonstrated in the past we always strive to have an optimal capital structure as well as aim for superior returns from the investments we make.

As we are closing a solid quarter I would like to step back and comment on what we stand for as a company and how we conduct that would business. We believe doing the right things for patients employees the environment and the communities. We serve will help build sustainable value for all our stakeholders, including our investors.

After 41 years, we are extremely proud of our track recalled and commitment to sustainability.

Finally, I would like to thank our employees around the world what indicated to making a positive impact on patients lives and all of the physician get eve as in occupancy in our clinical development programs, our past and future achievements would not be realized that passion and commitment we that we will open the call for questions.

Michel Vounatsos: As we are closing a solid quarter, I would like to step back and comment on what we stand for as a company and how we conduct our business. We believe doing the right things for patients, employees, the environment, and the communities we serve will help build sustainable value for all our stakeholders, including our investors. After 41 years, we are extremely proud of our track record and commitment to sustainability. Finally, I would like to thank our employees around the world who are dedicated to making a positive impact on patients' lives, and all of the physician caregivers and participants in our clinical development programs. Our past and future achievements could not be realized without their passion and commitment. With that, we will open the call for questions.

If you would like to ask a question. Please press Star then one on your telephone keypad as a reminder, please limit yourself to one question. If you require any further follow up you May proceed I want to again to rejoin the queue.

Our first question comes from the line of Cory Kasimov with Jpmorgan.

Hey, good morning, guys and thank you for taking my question. So I wanted to ask about Spinraza and it sounds like there hasn't been an impact thus far from zale gains by at least to date, but I'm curious if you're seeing any signs of potential warehousing of the minority portion of SMB patients that are currently eligible for gene therapy, and how you're thinking about the growth outlook for the product when considering a nice year over year jump in sales, but another quarter over quarter decline before competition potentially kicks in thanks.

Operator: If you would like to ask a question, please press star and then 1 on your telephone keypad. As a reminder, please limit yourself to one question. If you require any further follow-up, you may press star 1 again to rejoin the queue. Our first question comes from the line of Corey Kazimoff with J.P. Morgan.

So Cory this is Jeff to this point, we don't see.

Geoff Meacham: Good morning guys, and thank you for taking my question. So I wanted to ask about Spinraza, and it sounds like there hasn't been an impact thus far from Zolgensma, at least to date, but I'm curious if you're seeing any signs of potential warehousing of the minority portion of SMA patients that are currently eligible for gene therapy, and how you think about the growth outlook for the product when considering a nice year-over-year jump in sales but another quarter Thanks.

We don't we haven't seen any indication that there may be any warehousing them, it's difficult to tell but but there is no impact at this point in time.

I mean as as we mentioned patients were up pretty well the year over year and they were up sequentially.

And if you look at kind of the largest segment of that patient pool, which as the adult segment at 660% of the market. We've only penetrated 20% of that and Zogenix was not indicated for that so we think there is ample opportunity to grow within the us and continue to post impressive patient numbers outside the us the opportunity frankly is larger and if you look at the chart that we put out last quarter. We originally thought that the PD mile GE within SMB was 20000, we now think it's 45000.

Geoff Meacham: So Corey, this is Geoff. To this point, we don't see or haven't seen any indication that there may be any warehousing. I mean, it's difficult to tell, but there's no impact at this point in time. As we mentioned, patients were up pretty well year over year, and they were up sequentially. And if you look at kind of the largest segment of that patient pool, which is the adult segment, it's 60% of the market, and we've only penetrated 20% of that. And Zolgens was not indicated for that.

So theres more patients outside the U.S. within the US we can continue to open up new countries and our experience in us and in the large European markets would indicate that we can continue to kind of penetrate the mature markets and open up new markets.

So.

We think it's a good growth opportunity in front of us.

Mike.

Yes, Cory I'll add to that well I mean clinically one thing that's.

Geoff Meacham: So we think there's ample opportunity to grow within the U.S. and continue to post impressive patient numbers. Outside the U.S., the opportunity, frankly, is larger. If you look at the chart that we put out last quarter, we originally thought that the number of cases within SMA was 20,000. We now think it's 45,000. So there's more patience outside the U.S. and within the U.S. We can continue to open up new countries, and our experience in the U.S. and in the large European markets would indicate that we can continue to kind of penetrate mature markets and open up new markets. So, you know, we think that there's a good growth opportunity in front of us. Mike.

You need to consider and this is for what.

Genzyme is indicated for is the under age to the Morse usually the more severe estimate patients for which time is really critical we know that the time of treatment.

Even before symptoms, but certainly as a function of symptom stage is really essential so that would tend clinically to be very different from the typical kind of scenario, where we might be waiting for a different new treatment.

So that you can share the underlining uptake of patients behind viz. A viz successful launch is the most I would say plus you can use in mature markets and in emerging geographies, where we are gaining excess so we remain confident obviously down more clinical trials in that space too.

Chuck Triano: Yeah, Corey, I'll add to that. Well, clinically, one thing that you need to consider in this is for what Zolgensam is indicated for in patients under age two, usually the more severe SMA patients for which time is really critical. We know that the time of treatment, even before symptoms, but certainly as a function of symptom stage, is really essential. So that would tend clinically to be very different from a typical kind of scenario where you might be waiting for a different new treatment.

And.

And it's still early days for this new topic, you guys, Dennis and we welcome for patients based on the severity of the disease.

Your next question comes from the line of Terence Flynn with Goldman Sachs.

Hi, Thanks for taking the question maybe a two parter just wondering.

Michelle or Jeff if there are any additional steps you're considering to bolster your balance sheet here beyond the sale of the Hill Rod facility and then you were fairly active on the repo front. This quarter just should we expect that pace to continue through the second half of the year and should we read into it as a sign of your confidence in your check for their IP. Thanks a lot.

Michel Vounatsos: So this is Michel. The underlining uptake of patients behind this very successful launch is the most, I would say, positive news in mature markets and in emerging geographies where we are gaining access. So we remain confident. Obviously, there are more clinical trials in that space, too, and it's still early days for these new therapeutic alternatives, and we welcome them for patients based on the severity of the disease.

So.

One of the many hallmarks of Biogen is a company with very strong cash flows we generated $3.4 billion of operating cash flow with us within within the first six months and we've now had the expiration of the tech for there.

Operator: Your next question comes from the line of Terence Flynn with Goldman Sachs.

Operator: Hi, thanks for taking the question. Maybe a two-parter. Just wondering, Michelle or Geoff, if there are any additional steps you're considering to bolster your balance.

Fuming farm.

Payments so.

At this point in time that there's really no intend to kind of.

Operator: Unknown executive, Ami Fadia, Adam Keeney, and Chris Schott, Biogen Inc.

If you mean by change the balance sheet lever up the balance sheet was certainly not the intent that that generates a lot of cash.

Operator: Just should we...

Operator: Just should we expect that pace to continue through the second half of the year and should we read into it as a sign of your confidence in your TechFedera IP? Thanks a lot.

With regard to uses of cash.

I think we've been very consistent that our capital allocation strategy strategy is.

Centered around optimizing the capital allocation to maximize shareholder value.

Geoff Meacham: So, you know, one of the many hallmarks of Biogen is a company with very strong cash flows. We generated $3.4 billion of operating cash flow within the first six months, and we've now had the expiration of the Tecfidera fumiform payments. So, you know, at this point in time, there's really no intent to kind of, if you mean by changing the balance sheet, lever up the balance sheet, but certainly not the intent that the company generates a lot of cash.

And we'll continue to do that and will.

Good thing is we've got ample capacity to do that either vis-a-vis share repurchase or continuing to add assets to the clinical pipeline visa business development or M&A. So I would look I would look for us to be active across the board because we'll have the capacity, it's very strong company from that perspective.

Your next question comes from the line of Omar Saad with Evercore.

Geoff Meacham: With regard to uses of cash, you know, I think we've been very consistent in that our capital allocation strategy is centered around optimizing capital allocation to maximize shareholder value. And we'll continue to do that. And the good thing is we've got ample capacity to do that either vis-à-vis share repurchase or continue to add assets to the clinical pipeline via business development or M&A. So I would look for us to be active across the board because we'll have the capacity, and it's a very strong company from that perspective.

Good morning, Thanks, so much for taking my question.

I wanted to focus on tech that era for a second and it seems that a few anda filers have withdrawn there and does and the case has been dismissed under a joint stipulation. So my question is has there been a formal settlement because we haven't seen a press release or did those and as just not lead bio equivalents.

So on my this is Jeff we're not going to comment on the specifics of our IP situation only to say that as Michelle said a lot of interest in kind of getting it resolved.

Your next question comes from the line of Geoffrey Porges with SVB Leerink.

Geoff Meacham: Your next question comes from the line of Umer Raffat with Evercore. Good morning. Thanks so much for taking my question. I wanted to focus on Tecfidera for a second, and it seems that a few ANDA filers have withdrawn their ANDAs, and the case has been dismissed under a joint stipulation. So my question is, has there been a formal settlement? Because we haven't seen a press release. Or did those ANDAs just not meet bioequivalence?

Thank you very much for taking the questions and congratulations on the good numbers in the quarter.

I suppose I have to ask a follow up on how to count on that.

You previously you disclosed that you are continuing to monitor the patients in the study and to see whether there was any evidence of clinical effect.

From a bit in the pivotal studies with prolonged exposure.

Could you share with us what you found with that extended follow up and secondly in that context.

Geoff Meacham: So, Umer, this is Geoff. We're not going to comment on the specifics of our IP situation, only to say that, as Michelle had said, there is a lot of interest in kind of getting it resolved.

How much.

Are you continuing to invest in the amyloid hypothesis.

And particularly in 24, one vessel staff.

Geoff Meacham: Your next question comes from the line of Geoffrey Porges with SVB Learing. Thank you very much for taking the time to answer my question.

Could you kind of reconcile those two for us. Thanks.

Operator: Congratulations on the good numbers in the quarter.

Jeff. Thank you for asking this to important question, obviously since we did not present that day I see it is clear to everybody that we are not ready when it's finished with our analysis of the data first available at the effective date of the strategic in that disease, but also the data that is coming after the cutoff date of the strategic.

Operator: I suppose I will have to ask for a follow-up on how to count them out.

Operator: Previously, you disclosed that you were continuing to monitor the patients in the study and to see what

Operator: [inaudible]

Michel Vounatsos: and particularly in 2401, Ellen Bessestat, could you kind of reconcile those two for us? Thanks.

Michel Vounatsos: Geoff, thank you for asking this important question. Obviously, since we did not present at AIC, it is clear to everybody that we are not ready.

So Biogen said and we continue to follow the science and these analyses out of critical importance as you can imagine for the patients for the community for PBC Keds and also for all the stakeholders.

Michel Vounatsos: We are not finished with our analysis of the data first available at the cut-off date of the futility analysis, but also the data that is coming after the cut-off date of the futility analysis. As Biogen said, and we continue to follow the science, these analyses are of critical importance, as you can imagine, for the patients, for the community, for public health, and also for all the stakeholders. And at the same time, Biogen is trying to reach new frontiers, which are difficult to define. So we will present the results of the Engage and Emerge studies at future medical meetings, and I hope you appreciate that we cannot say much more at this stage.

And at the same time vision, you train to reach new frontiers, which is difficult to define so we will present the results of engage and emerge studies at a future medical meetings and I Hope you appreciate that we cannot say much more at this stage.

Your next question comes from the line of Michael Yee with Jefferies.

Hey, Thanks. Good morning. Appreciate the question I had a question for al Sandrock, if he's there or Mike, but that was regarding the comments around below nine to the towel PSP study I know you completed enrollment I guess late fall last year. So the data is coming like you alluded to maybe just talk to.

How we should.

Put into context, the phase two b, how much confidence you have on the endpoint, but perhaps more importantly, after a pre specified endpoint you're looking at subgroups whats important to define supporting the tile hypothesis for talent, but these are more importantly, Alzheimer's thanks much.

Operator: Your next question comes from the line of Michael Yee with Jeffrey. Hey, thanks, good morning; I appreciate the question. I had a question for Al Sandrock, if he's there, or Mike, but that was regarding the comments around BIP-092, the Tau PSP study. I know you completed enrollment, I guess, late fall last year, so the data is coming in as you alluded to. Maybe just talk about how we should put into context the Phase 2B, how much confidence you would have on the endpoint, but perhaps more importantly, if there are pre-specified endpoints you're looking at, subgroups, what's important to you to define supporting the Tau hypothesis for Tauopathies or, more importantly, Alzheimer's?

Michael This is out so the.

We have been saying that the results will be available later this year towards the end of this year.

As you know in the earlier Phase studies, we showed about a 90% decrease in CSF three towels all types.

And so we definitely have target engagement because the antibody was given intravenously and we looked in the CSF at south So we have target engagement in the CNS, but we're hoping to see is an effect on our rating scale for PSP, which is not that different from the Parkinson's rating scale.

Chuck Triano: Thanks so much.

Chuck Triano: Michael, this is Al. So the, we've been saying that the results will be available at the, you know, later this year toward the end of this year. As you know, in the earlier phase studies, we showed about a 90 [inaudible] I'm not going to go through all of the features of Parkinson's disease but there's some additional features that relate to PSP that will also be measured and yeah the big question right now is we have target engagement we have lowered CSF tau we're hoping to catch the tau as it spreads the abnormally the misfolded taus it spreads from cell to cell there's a lot of great data that there's prion-like propagation in the CNS in PSP and in other tauopathies and we'll see whether or not we catch it as it tries to spread and have a clinical effect.

As you know there are it has many of the shares many of the features of Parkinson's disease, but there are some additional features that relate to PSP that will also be measured and that you have the big question right. Now is we have target engagement, we have lowered CSF towel, we're hoping to catch the Tao as it spreads the abnormally the misfolded tiles. It spreads from Silva. So there is a lot of great data that theres prion like propagation in the CNS and PSP and in other Taiwan, but these and we will see whether or not we catch it in as it tries to spread and to have a clinical effect.

Your next question comes from the line of Ronny Gal with Bernstein.

Operator: Your next question comes from the line between Ronnie Gao and Bernstein.

Operator: Good morning and thank you for taking my question. Just a couple of quick things on the pipeline. On the PSP,

Hi, Good morning, and thank you for taking my question just a couple of quick things in the pipeline on the PSP trial just following on Corey.

Dr. Michael Ehlers: PSP trials are falling on Corey. How many of those patients had tau in their brains by imaging? I know that wasn't available ahead of the trial, but I suspect you did it during the trial. And second, Mike, I noticed you upped your investment in Skyhawk a couple of weeks ago. Care to share with us roughly how long before you have an oral SMA product in the clinic?

How many of those patients had that towel in their brand by imaging I know that wasn't available ahead of the trial, but I suspect you did during the trial and second.

Mike and obviously you upped your investment in Nash Skyhawk, a couple of weeks ago.

And can you share with us so roughly how long before you will have an oil as the main product in the clinic.

Okay. Thanks for that question I'll take both those first of all what just one point of clarification with the tail off at the end PSP. The current pet imaging tracers for Tao don't recognize the form of tile that accumulates and PSP recognizes that form of how the accumulates in and Alzheimer's disease. This has to do with the three arm versus four our Tao.

Dr. Michael Ehlers: Thanks for the question. I'll take both of those.

Operator: First of all, just one point of clarification about tauopathy and PSP: the current PET imaging tracers for tau don't recognize the form of tau that accumulates in PSP, but they recognize the form of tau that accumulates in Alzheimer's disease. This has to do with the 3R versus 4R tau. So just to clarify that.

So just to clarify that.

Chuck Triano: None of them would have been imaged because there hasn't been an ability to image tau in the brain for that. On Skyhawk, the collaboration is proceeding very nicely. We're working on several targets with them, and we're zeroing in on potential new clinical candidates. We don't have a timeline just yet, but I would say that we're very, very happy with the progress on many targets in this way, and we hope to get some to the clinic over the next week. A couple years, let's say.

None of them would have been image because there hasn't been an ability to image town the brain for them.

On Skyhawk, yet that collaboration is proceeding very nicely, we're working on several targets with them. We're zeroing in on potential new clinical candidates. We don't have a timeline just yet, but I would say that were very very happy.

With the progress on on many targets in this way and we hope to get some to the clinic.

Over the next.

Couple of years, let's say.

Operator: Your next question comes from a line from Phil Nadeau with Cowan and Company. Good morning, thanks for taking my question.

Your next question comes from the line of Phil Nadeau with Cowen and company.

Good morning, Thanks for taking my question just one question on the evolve Amss. Two trial you mentioned that data is coming over the next few weeks could you remind us of the design of the study and in particular aside from Gi Tolerability. What other data is going to be disclosed that in the top line release.

Chuck Triano: Just one question on the Evolve MS-2 trial. You mentioned that the data is going to be out over the next few weeks. Could you remind us of the design of the study? And, in particular, aside from GI tolerability, what other data is going to be disclosed in the top-line release? And how would you frame the risk-benefit that's likely to come out of the study? So what would be a meaningful GI tolerability improvement in your minds?

And how you would frame risk benefit.

I could come out of the study so what would be a meaningful Jerry tolerability improvement and in your mind.

Hi, Phil this is al sandrock so.

Operator: Hi Phil, this is Al Sandrock. So it's basically a head-to-head study against Tecfidera. The primary outcome measure is a patient-reported outcome on GI tolerability. And we're looking at essentially all aspects of GI tolerability, whether it's higher or lower, the severity, the duration, and hopefully, what we'll get at the end of it is an incidence, an idea of the difference in the incidence of GI tolerability events between Tecfidera and placebo as well as severity. And in talking to our prescribers, the MS prescribers, incidence is probably the most important thing, although ultimately you want to try to improve compliance, so we'll also be looking at things like discontinuation rate, which, as Mike said in the Evolve 1 study, we had a very low discontinuation rate, so we're hopeful that we'll see a nice comparison to Tecfidera in this Evolve 2 study.

It's basically a head to head study against Tech Vidara. The primary outcome measure is a patient reported outcome on Gi Tolerability and where we're looking at are essentially all aspects of Gi tolerability, whether its upper or lower.

The severity the duration and hopefully we'll get at the end of it is in incidents an idea of the difference in the incidence of Gi Tolerability events.

Between.

Comparison with tech for Dara as well as severity.

And and in talking to our.

The prescribers Dms prescribers incidence is probably the most important thing although ultimately you want to try to improve compliance. So we'll also be looking at things like discontinuation rate.

Which as Mike said in the evolve one study we had a very low discontinuation rate so.

So we're hopeful that we'll see.

A nice comparison detect proterra this evolve to study.

Your next question comes from the line of Matthew Harrison with Morgan Stanley .

Michel Vounatsos: Your next question comes from the line of Matthew Harrison with Morgan Stanley. Good morning. Thanks for taking the question. I just wanted to follow up on something Phil just asked. Can you just talk about, if you're able to achieve the profile that you've talked about with Numerity in terms of, let's say, lowering of incidence, how does that impact how you think about the drug commercially? Would you expect to be able to try and switch taxidermic patients who are already stable, and because I know most of the GI effects come early in the drug, how should we think about Numerity commercially Thanks.

Great. Good morning, Thanks for taking the question I just want to follow up on until just a few can you just talk if you're able to achieve.

The profile that Youve talked about with the narrative in terms of lets say lower end incident, I mean, how does that impact how you think about the job commercially.

When do you expect to be able to try and switch tack for their patients who are already stable and because I noticed that JCI thats come early in the drug or how should we think about.

Meredith commercially if you're able to achieve that profile. Thanks.

So thanks for the good question, obviously in we need to consider the outset that the patients on deck. After the full five first weeks as stabilized and they're doing fine. So the strategy is not to switch the strategy is to expand.

Chuck Triano: So thanks for the good question. Obviously, we need to consider from the outset that the patients on tech after the four or five first weeks are stabilized, and they're doing fine. So the strategy is not to switch; the strategy is to expand.

Operator: Yeah, I mean, most physicians that I talk to would not want to switch somebody who's done well, who's stabilized in the initial phases of taking Tacfidera and who is doing well in terms of tolerability. Of course, if there's breakthrough disease, you would consider switching to a different mechanism of action.

Yes, I mean, most physicians that I talk to.

I would not want to switch somebody who's done well who's stabilized.

The initial phases of taking tech for Idera, and we're doing well in terms of Tolerability of course, if theres breakthrough disease, you would consider switching probably to a different mechanism of action.

Dr. Michael Ehlers: Your next question comes from the line of Salim Syed with Mizuho. Hey guys, thanks for taking the question. Mike or Al, I have a question for you. You guys have mentioned in the past, I believe, that you are looking at new MS targets. I was curious what your thoughts were on EBV as a target. Thank you.

Your next question comes from the line of Saliq Ziad with Mizuho.

Hey, guys. Thanks for taking the question.

Mike I'll answer the question for you actually you guys have mentioned in the past I believe that you are looking at new targets and just curious what your thoughts were on as a target. Thank you.

Chuck Triano: Yes, so this is Mike. Look, I'll say this this has been a long-standing, interesting hypothesis. We've really rejuvenated our effort on early targets in MS and novel targets, including some things that might be virally based and other cell-based things. Still early days on a lot of that, but we've created a new highly dedicated group focused on early stage MS research and novel mechanisms. And so where we see an opportunity, independent of modality, we will pursue that.

Yes. So this is Mike.

Look I'll say this this has been a long standing interesting hypothesis, we have really.

Rejuvenated our effort on.

On early.

Targets in MMS and novel target, including some things that might be by early based and other cell base.

So early days and a lot of that but we've we've created a new highly dedicated group.

Focused on early stage and this research and novel mechanisms and so where we see an opportunity.

Independent of modality, we will advance that.

Operator: The EBV is a very interesting virus. If you look at epidemiological studies in MS, particularly out of the Harvard School of Public Health, there's a strong indication that EBV infection precedes the onset of MS. It's very exciting that the B-cell follicles that are in the CNS, in the submeningeal space, generally are EBV-positive. EBV affects B-cell function, and B-cells are obviously important in MS, as seen by all the drugs that are directed against B-cells, ocrelizumab and BTK inhibitors that seem to have efficacy. So I think, in some ways, EBV is very interesting as a causal virus. However, in terms of treatment, you know, once the virus activates the immune system toward an autoimmune state, I don't know whether getting rid of the virus will help. These B-cell follicles in the CNS, perhaps getting rid of the EBV-positive B-cells there may be helpful. But treating the virus itself, you'd have to design a study very, very early, perhaps even before MS even starts.

The NPV is a very interesting virus, if you look at epidemiological studies and us.

Particularly out of Harvard School of public health.

There is a there is a strong implication that NPV infection preceded the onset of MMS.

It's very tantalizing that the VSOE follicles that are in the CNS in this segment NGL space generally there NPV positive FX b cell function and B cells are obviously important in a mask as seen by.

All the drugs that are directed against B cells Ocrelizumab in BTK inhibitors that seem to have efficacy. So so I think in some ways mpvs very interesting as a causal virus.

However in terms of treatment.

No.

Once the virus activates the immune system toward an auto immune state I don't know whether getting rid of the virus Wo will help these b cell follicles in the CNS.

Perhaps getting rid of the NPV positive b cells, there may be helpful. But the treating the virus itself you'd have to design a study very very early perhaps perhaps even before a mess even starts.

Your next question comes from the line of Brian Abrams with RBC capital markets.

Geoff Meacham: Your next question comes from the line of Brian Abrahams with RBC Capital Markets. Hi there.

Hi, there thanks for taking my question.

Operator: Thanks for taking my question. I appreciate the strategic updates and congrats to Joe on his new role. You talked about immunology as a more formalized area of focus. I was wondering if you could speak a little bit broadly about how you plan to approach this space, maybe which of your assets you expect to prioritize, and then potential BD and future commercial strategies that you're thinking about within immunology.

Appreciate the strategic updates.

And congrats Joe on his new role.

He talked about our immunology as a more formalized area of focus I just wonder if you could speak a little bit broadly about how you plan to approach the space, maybe which of your assets you expect to prioritize and then potential BD and future commercial strategy.

That you're thinking about within the immunology. Thanks.

Dr. Michael Ehlers: Sure, Brian, this is Mike. I'll start out with that. So, you know, we're very happy about this. Where we're going to start with focus is where we've got existing assets and or expertise. By and large, right now, that's really going to start with our lupus programs that include BIP59, the BDCA2 antibody, and Daprolizumab Pegol, this anti-CD40 ligand fab. And from that, we will look at things that touch on that, either within that indication space or perhaps in and around those mechanisms to expand. It will start with those places where we've got existing assets and or capability. We think it fits very nicely with a lot of the ongoing programs and things that we're otherwise doing. It also, I'd say on the business development front, does give us an ability to look somewhat more broadly at external opportunities we might be able to use for early, either early or late, supplementation of the pipeline.

Sure Brian This is Mike I'll start out with that so.

We're very happy about this where we're going to start with focus is where we've got existing assets and our expertise by and large right now that's really going to start with our lupus programs and include bid 59, the BDC two antibody and digital is met peg all this anti Cdforty line again.

Fab.

And from that we will look at things that touch on that either within that indication space or perhaps in and around those mechanisms to expand.

It will start with those places where we've got existing assets into our capability. We think it fits very nicely with a lot of the ongoing programs and things that were otherwise doing it also I'd say on the business development front does give us an ability to look somewhat more broadly at external opportunities might be able to use for the either early or late supplementation of the pipeline.

Operator: Your next question comes from the line of Paul Matteis with SIPA. Great, thanks so much for taking the question.

Your next question comes from the line of Paul Mcleish with Stifel.

Great. Thanks, so much for taking the question.

Geoff Meacham: I wanted to ask a question on business development. What is Biogen thinking on the ongoing delays with the Roche SPARC deal and what that might mean for your ability to do M&A in areas where you already have a strong presence? For example, you have a pretty broad pipeline and assets either in your pipeline or marketed in a lot of areas of neurology. Does the delay that's going on, which seems to be about therapeutic overlap, make you at all reluctant to be more aggressive in M&A in areas where you already have a presence? How does this complicate things, if at all?

I wanted to ask a question on business development.

What is by agents thinking on the ongoing delays with the Roche spark deal and what that might mean for your ability to do M&A in areas, where you already have a strong presence. For example, you have a pretty broad pipeline.

And assets either in your pipeline, our market and a lot of areas of neurology.

Just the delay that's going on which seems to be about therapeutic overlapped, making it all reluctant to be more aggressive in M&A in areas, where you already have a presence how does this complicate things if at all thanks.

Operator: Thanks.

Operator: So it's always difficult to kind of, I think what you're getting at is kind of anti-trust. You know, I think we'll take a careful approach as we look at business development, but we don't see that as a deterrent to be active from a BD or M&A perspective, but we'll certainly be careful as we kind of look at targets.

So it's always difficult to kind of any would you would you are getting at is kind of anti trust.

I think we'll take a careful approach.

As we look at business development, but we don't see that as a deterrent to be active from a BD. Your M&A perspective, but we'll certainly be careful as begin to look at targets.

Operator: Your next question comes from the line of Evan Seigerman with Credit Suisse. Hi guys, thank you for taking the question and congratulations on the progress. I'm one for Al and Michael, so with the recent failure of a base inhibitor reported by Amgen and Novartis, why does Biogen continue to pursue the development of Elambesistat? And, generally, given the failure of A-beta antibodies, what gives you confidence that targeting Tau is the right approach for AD?

Your next question comes from the line of Adam Siegelman with Credit Suisse.

Hi, guys. Thank you for taking the question and congrats on the progress I'm, one for al or Michael So with the recent failure of a base inhibitor reported by Amgen and Novartis why does Biogen continue to pursue development Nobel invest the stat and generally given the failure of a beta antibodies. What gives you confidence that targeting how is the right approach for 80.

Dr. Michael Ehlers: So, Evan, why don't I start with this? Of course, you know, we're highly aware of all the announcements around base inhibitors and the recent Novartis and Amgen announcement of the termination of their discontinuation of their base inhibitors. So we're highly aware of this. I would say, you know, patient safety is paramount in our clinical trials, including the Mission 81 and Mission 82 trials for the base inhibitor that are being conducted in collaboration with our collaboration partner ACI. Those studies have an independent data and safety monitoring board that reviews the data regularly from those phase three studies. And to date, the DSMB has recommended the studies proceed. They have the ability to look at that data when they want. And they're certainly aware of, likewise, the safety signals and discontinuation of other programs.

So I'm wondering why don't I take a began this of course.

We're highly aware of all the announcements interim base inhibitors, and recent Novartis and Amgen announcement of the termination of their.

Disk into their base inhibitors.

So we're highly aware this I would say.

Patient safety is paramount in our clinical trials, including the mission 81 emission 82 trials.

For the base inhibitor that is being conducted in collaboration with our.

Collaboration partner ASE side.

Those studies have an independent data and safety monitoring board that reviews. The data regular leave from those phase three studies and to date. The DSMC has recommended the study's proceed.

They have an ability to look at that data when.

When they want and and and they're certainly aware of likewise, the safety signals and discontinuation of other programs and they will be assessing and as long as it goes along.

Dr. Michael Ehlers: And they will be assessing it as it goes along. As to Band 2401, I'll refer back to what Michelle commented on earlier, which is that we are in the midst of a very thorough analysis of all the engaged and emerging data from Aducanumab, which is an extensive data set, and we would like to have a full understanding of that data before we make specific forward development decisions on Band 2401.

As to ban two 401 I'll refer back to what Michelle commented on earlier, which is that we're in the midst of a very thorough analysis of all the engage in emerged data from added kanemaru, which has an extensive datasets.

And we would like to have a full understanding of that data before we make a specific forward development decisions on van two 401.

Operator: Okay, I think we have time for about two more questions. Your next question will come from the line of Carter Gould with UBS. Great. Thanks, guys. I guess for Michelle and Michael, as far as your comments earlier around rebalancing the risk-reward of the pipeline, it sounded like that was really kind of externally focused, but I wanted to ask if there's any sort of thoughts on a way to also revisit maybe already existing programs and any change there in sort of the hurdle for moving programs forward. Any color there would be appreciated. Thank you.

I think we have time for about two more questions.

Your next question will come from the line of Carter Gould with Tvs.

Great. Thanks, guys.

I guess from a short Michael as far as your comments earlier around rebalancing the risk reward of the pipeline. It sounded like that was really kind of.

Externally focused but I wanted to ask if there is any sort of.

Thoughts on way to also revisiting maybe already existing programs and any change there in sort of the hurdle for for moving programs forward.

Any color there would be appreciated thank you.

Dr. Michael Ehlers: Yeah, Carter, good question. So I mean, a few things you'd say to maybe flesh that out a little bit. I mean, we've had an ongoing effort for some time to really look at the risk-reward profile and that means being able to balance risk in different categories and include things like seeking later stage assets where we can, taking advantage of unique capabilities where we see them leveraging our depth in certain areas like MS and neuromuscular, where we've got very strong franchises. And likewise, going after the types of diseases where we've got high confidence, things where you've got genetically defined targets and genetically defined patient populations. And you can see examples of that in our pipeline that have been very intentional.

Yeah Carter good question. So I mean, a few things say to maybe flesh that out a little bit I mean, we've had an ongoing effort over some time to really look at the risk reward profile.

And that means to be able to balance risk in different categories and includes things like seeking later stage assets, where we can.

Taking advantage of unique capabilities, where we see them leveraging our depth in certain areas like SMS and neuromuscular, but we've got.

Very strong franchises and use and likewise going after the types of diseases, where we've got high confidence things were there you've got to genetically defined targets ingevity defined patient populations and you can see examples of that in our pipeline that have been very intentional. These include things like food Maridadi as a very good example of rebalancing risk supporting RMS franchise that you see that within our night Star acquisition and the mid to late stage clinical programs in gene therapy, they're accrued arena and excellent written as Pigmentosa and hopefully that came across in my emphasis on our confidence in our ace So platform at a CIO programs that we've been advancing in collaboration with Ionis.

Dr. Michael Ehlers: These include things like Boomerity as a very good example of rebalancing risk, supporting our MS franchise. I think you see that within our Nightstar acquisition and the mid to late stage clinical programs in gene therapy there, in the choroid arena, and X-linked retinitis pigmentosa. And hopefully that came across in my emphasis on our confidence in our ASO platform and ASO programs that we've been advancing in collaboration with Ionis. In addition to that, I think, and Michelle spoke to this, we look to our important clinical readouts, our 10 upcoming clinical readouts in the next 18 months as trigger points to help define and refine the areas that we really want to concentrate resources and activity on in the future.

In addition to that I think and Michelle spoke to this we look to our important clinical readouts are 10 upcoming clinical readouts in the next 18 months as trigger points to help define and refine the areas that we really want to concentrate resource and activity on in the future.

Michel Vounatsos: If I may just add to the good comments made by Mike, it's also the opportunity to widen the strategic lens and important readout in the coming months with BIP59 in Le Pre. So stay tuned.

Hey, maybe just to add to the to the good comments made by Mike you too.

Also the opportunity to widen the strategy plans and the important read outs in the coming months, we'd be 59.

In lupus.

So stay tuned.

Operator: Our final question will come from Mohit Bansal with Citigroup. Great, good morning, and thanks for taking my question and a very warm welcome to Joe from our side as well.

Our final question will come from the line of Mohit Bansal with Citigroup.

Great. Good morning, and thanks for taking my question and a very water or warm welcome Joe from our side is that.

Geoff Meacham: Quickly on guidance, it appears to be indicating a slight decline.

So quickly on guidance it appears to be indicating a slight decline or maybe flat revenues in the second half versus the first half you mentioned inventory, but could you. Please provide little bit more glad it granularity on the process of thought process for the remainder of the year is it a good friend Biosimilar, which is a bigger factor here. Thank you.

Operator: [inaudible]

Geoff Meacham: So we're not, we don't, we have a policy of kind of giving guidance twice a year and not doing it by the product level. But what I can do is kind of maybe point you to some. We also in the second quarter, the MS business was quite strong as a result of less of an inventory dry down and some gross to net favorability, which we don't expect to continue. And then two other factors that I would highlight are Benraza will face some more difficult comparisons in the second half of this year compared to the first half of this year; the numbers get bigger. And then finally, Rituxan and Gaziva. We've said all along that we expect competition to come in the fourth quarter. So if you look at all those factors, it would indicate that there would be a little bit more strength in the first half versus the second half.

So we're we're not we don't we have a policy of kind of given guidance twice a year not doing it by the product level, but what I can do is kind of maybe point you to some.

Some areas within the historical numbers certainly in the first quarter by other bio Veritiv inventory sale certainly helped the first quarter inventory growth you have to look at that that there was a one time type element. We also in the second quarter. The SMS business was quite strong as a result of the less of an inventory drawdown and some gross to net favorability.

Which we don't expect to continue.

And then two other factors that I'd highlight as Spinraza will face some more difficult comparisons in the second half of this year compared to the second the first half of this year as the numbers get bigger and then finally the reduction in design. We've said all along that we expect competition to come in in the fourth quarter. So if you look at all those factors that would indicate that would build more strength in the first half versus the second half.

Operator: Golly, very helpful. Thank you.

Operator: So thank you all for attending our call today. Another very strong quarter for our company. Very exciting times at Biogen nowadays. Thank you. Talk to you soon.

Got it very helpful. Thank you.

Just so thank you all for attending our call today, another very strong quarter for our company very exciting times at Biogen Nowadays. Thank you talk to you soon.

Operator: Ladies and gentlemen, this will conclude today's call. Thank you all for joining, and you may now disconnect. Thank you for watching!

Ladies and gentlemen, this will conclude today's call. Thank you all for joining and you may now disconnect.