Q2 2022 Biogen Inc Earnings Call
Speaker 2: Good morning. My name is Katie, and I will be your conference operator today. At this time, I'd like to welcome everyone to the Biogen second quarter earnings call and financial update. 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 1 on your telephone keypad. Please limit yourself to one question to allow participants time for questions.
Speaker 2: If you require any further follow-up, you may press star 1 again to rejoin the queue. Thank you. I would now like to turn the call over to Mr. Mike Henke, head of investor relations. Mr. Henke, you may begin your conference.
Speaker 3: Good morning and welcome to Biogen's second quarter 2022 earnings call. 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 our GAAP financial measures and the reconciliation of the GAAP to non-GAAP financial measures that we will discuss today.
Speaker 3: Our financials are provided in Tables 1 and 2, and Table 4 includes a reconciliation of our gap-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 put up 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.
Speaker 3: and our actual results may differ materially. I encourage you to consult the risk factors discussed in our SEC filings for additional detail. I encourage you to consult the risk factors discussed
Speaker 3: On today's call, joined by our chief executive officer, Michelle Wunapsos, Dr. Priya Singhal, interim head of search and development, and our CFO , Mike McDonald.
Speaker 3: Mind her during the Q&A portion of the call, we kindly ask that you limit yourself to one question. I will now turn the call over to Michelle. Good morning, everyone, and thank you for joining us. Biogen continue to execute well in the second quarter, and we are pleased to be raising our fully financial guidance.
Speaker 4: We believe our treatment is critical steps on our path to drive renewed value creation for both patients and share orders over time.
Speaker 4: First, together with SI, we're granted priority with you for Lecane Mab under the Accelerated Approval Pathway in the US for early Alzheimer's disease. We expect an FDA decision by January 6th of next year, and in parallel, we look forward to the upcoming FA3 without expected in the fall. We look forward to the upcoming FA3 without expected in the fall.
Speaker 4: Additionally, together with SAGE, we reported data in postpartum depression. The Skylark study is now the second positive phase three study supporting the potential of Xyron in PPD with four additional positive randomized controlled trials in major depressive disorders. We believe there is a substantial body of evidence supporting a significant opportunity for Xyron. Thank you.
Speaker 4: The pursuit of innovation, however, does not come without setbacks, and we were disappointed to learn that the B-04 phase two study in Schizofrenia was not positive.
Speaker 4: I will now focus on the near-term operational priorities we outlined in our last call, while Priya will review our recent progress in R&D and Mike will discuss our second quarter performance.
Speaker 4: First, we are continuing to focus our R&D resources on programs where we see the greatest potential while also aiming to rebalance the risk profile across our pipeline. For example, we intend to accelerate the regulatory filing of Zuranolon in postpartum depression following the positive scale axed areas.
Speaker 4: In addition, we have terminated some R&D programs that we believe lower quality of success, such as B076 and anti-dow antibody in Alzheimer's disease and B100, a small molecule.
Speaker 4: SPO inhibitor in ALS
Speaker 4: Second, we are on track to implement the cost reduction and productivity measures outlined on our last call. In order to further line our costs with our revenue base while maintaining our focus on execution.
Speaker 4: Third, we are pursuing additional global growth opportunities with a focus on key emerging markets. This includes China, where we are encouraged by the launch of Spinraza.
Speaker 4: Fourth, we are focused on driving renewed growth in our biosimilars business. We just recently launched BioViz, the first biosimilar referencing Lucentis in the US, representing Biogen's first entry into the US biosimilars market. We also expect to begin launching BioViz outside the US early next year.
Speaker 4: With the completion of the sales of our joint venture interest in Samsung Bioepiece in the second quarter, we now have an expanded ability to pursue the bio-similar business on our own, as we aim to bring mobile-use similar products to more patients. As we aim to bring mobile-use similar products to more patients.
Speaker 4: She'll refuse it.
Speaker 4: We continue to advance our biosimilar path line, which includes two phase three programs, Differencing, Allia and Abd??? Energy Network, far from 100 ol? armas chief, you
Speaker 4: Fifth, we remain focused on capital location during the quarter. We entered into new collaborations with MedRhythm, EMS, and electors in Parkinson's disease.
Speaker 4: And we continue to evaluate both internal and external value creation opportunities.
Speaker 4: We also return approximately $500 million to shareholders and bring the quarter through sharey purchases. We also return $500 million to shareholders and bring the quarter through sharey purchases.
Speaker 4: We are also pleased with the progress in our collaboration with GenTech for Mozignitezumab, a CD20, CD3 by specific antibody, which was recently approved in the EU for patients with relapse or respiratory follicular lymphoma. The BLA of Mozignitezumab medication was recently granted priority review by the FDA and we look forward to potential approval in the US.
Speaker 4: Our progress across these areas in addition to the recent advancements we have made in R&D have the potential to have growth over time.
Speaker 4: Of course.
Speaker 4: We have not all our programs we deliver the results we hope, which is why we are continuing to advance, to build a diversified and appropriately balanced pipeline as we work to create and sustain a multi-franchised portfolio over time.
Speaker 4: This includes Newton opportunities in Alzheimer's disease and depression followed by other areas such as Parkinson's disease, Lupus and Stroke in the mid-to-late 2020s.
Speaker 4: We remain committed to taking advantage of all the strengths of the company, our talent, our portfolio, our manufacturing capabilities, our pipeline, which includes 10 programs in phase three or filed, and our strong balance sheet to deliver results for both the patients we serve and our shareholders.
Speaker 4: I will now turn the call over to Priya for an update on our recent progress in R&D.
Speaker 5: Thank you, Michelle, and good morning, everyone.
Speaker 5: I would like to start by thanking the biogen team for their focus and dedication as we continued to advance to the Boston diversified R&D pipeline. The Boston diversified R&D pipeline.
Speaker 5: As Michelle mentioned, we had several exciting our indie achievements this past quarter that I believe are key steps to advancing our pursuit of meaningful new therapies for patients.
Speaker 5: Starting with Alzheimer's disease.
Speaker 5: As Michelle mentioned, the FDA has accepted and granted priority review for the BLA for lecanumab in early Alzheimer's disease under the accelerated approval pathway.
Speaker 5: Esai is also continuing to progress in the Canemap Phase 3 Clarity Study with an expected readout this fall.
Speaker 5: The CLARITY-AD study was designed to build upon the results of the prior phase to study and utilizes clinically valid assessments designed to evaluate various aspects of cognition and function.
Speaker 5: Given the robust trial design, we believe that the totality of the Clarity AD results should allow us to further understand the effect of amyloid removal on different clinical domains of Alzheimer's disease.
Speaker 5: The FDA read that clarity AD when completed can serve as a conformatory study to verify the clinical benefit of the cannabis.
Speaker 5: Pending the results of the AD study, E-Sci plans to file for traditional approval of lakanumab in the US, EU and Japan at the end of Q1 2023.
Speaker 5: This timing may allow for lecanumab, if approved, to become the first anti-amyloid antibody for Alzheimer's disease with traditional approval.
Speaker 5: Last quarter, you simulation modeling based on the Canemab Phase 2 result.
Speaker 5: Esai also published an analysis as to make potential long-term outcomes of treatment with little animal. Thank you. Thank you.
Speaker 5: The results of this analysis suggest.
Speaker 5: that compared to standard of care alone, individuals treated with Lacanumab, in addition to standard of care, may potentially experience slower disease progression to mild, moderate, and severe Alzheimer's disease from baseline.
Speaker 5: by 2.51, 3.13 and 2.34 years on average respectively.
Speaker 5: These preliminary results could possibly scale additional quality adjusted life years and reduction in formal and informal costs of this disease.
Speaker 5: Beyond lecanomab, we continue to advance the resonance pipeline that is diversified across molecular targets and modalities.
Speaker 5: This includes BIB 80, our ASO targeting tau, where we expect to initiate a Phase 2 study later this year.
Speaker 5: Moving to NeuroSecond.
Speaker 5: Together with Sage, we were very excited to announce positive results from the Skylar of the Rana Lone in postpartum depression.
Speaker 5: The Skylark study met its primary endpoint and all key secondary endpoints with a two-week course of 50 mg ran alone demonstrating a statistically significant improvement in the symptoms at day 15 as compared to placebo, the primary endpoint, and at day 3, day 28 and 45. The study met its primary endpoint and all key secondary endpoints at day 15 as compared to placebo, the primary endpoint, and at day 28.
Speaker 5: This is the second positive Phase III study of Ziranalone in postpartum depression further reinforces the clinical profile of Ziranalone that has been observed to date.
Speaker 5: Postpartum depression is one of the most common medical complications occurring during and after pregnancy.
Speaker 5: affecting an estimated one in eight mothers or approximately 500,000 women in the United States each year. or approximately 500,000 women in the United States each year.
Speaker 5: Depression, sadness, anxiety, thoughts of hurting oneself or one's infant and thoughts of suicide are common signs associated with PPD. Weme of Time,
Speaker 5: This is an area of significant unmet need where new treatment options are desperately needed.
Speaker 5: With the SkyLock study results now in hand, we are working with Sage to advance a single regulatory filing for the RAN ALON in MDD and PPD in the US, which we expect to complete in the second half of this year.
Speaker 5: Last quarter, SAGE also presented the results of the Ziranalone Human Abuse Liability Potential Study.
Speaker 5: at the college on problems of drug dependence annual meeting.
Speaker 5: The results of this study showed that 30 and 60 milligrams of zoranolone demonstrated lower abuse potential as compared with abilene.
Speaker 5: 1.5 mg and 3 mg in computational users of CNN Essence.
Speaker 5: 90 milligrams of Durana loan was comparable to Al Prasal loan, 1.5 milligrams and 3 milligrams.
Speaker 5: As a reminder, the Zoranolones doses studied in the MDD and PPD trials were between 20 to 50 milligrams.
Speaker 5: Also in Urosakaji.
Speaker 5: We were disappointed that the tally phase two study of bib 104 and cognitive impairment associated with schizophrenia or CIS did not meet its primary or secondary efficacy end point.
Speaker 5: Most adverse events in the BIB 104 treatment arms were mild to moderate in severity.
Speaker 5: given the consistent lack of efficacy.
Speaker 5: observed across the primary and secondary measures of cognition and functioning.
Speaker 5: While demonstrating expected drug exposure levels during the entire 12-week evaluation period, we have decided to discontinue the BID 104 program in CIS. The BID 104 program in CIS.
Speaker 5: We are continuing to analyze the data and plan to present detailed results at an upcoming scientific forum.
Speaker 5: Moving to our Neuro-Muscle Report for you.
Speaker 5: Last month we presented new 12-month data from the VALOR Phase III study and its open extension of the person in SOD1-ALS, a progressive and rare genetic form of ALS.
Speaker 5: This analysis was designed to evaluate participants who initiated to first and during the next month the feebo control period in valor. Versus individuals originally on placebo who had a delayed start of the first and treatment during the start of the open label extension. During the start of the open label extension.
Speaker 5: The results of the new fund analysis showed that initial earlier initiation of to first level results to be an important milestone.
Speaker 5: float decline across measures of clinical and respiratory function.
Speaker 5: strength and quality of life.
Speaker 5: Furthermore, the person led to robust and sustained reductions in neurofilament, a marker of axonal injury and neurodegeneration.
Speaker 5: We believe that these results build upon the encouraging trend.
Speaker 5: disease progression originally observed in the VALOR 6 month randomized study.
Speaker 5: further support the potential for Tofersyn to slow disease progression in SOD1 ALS.
Speaker 5: We continue to engage global regulators with these decisions.
Speaker 5: and we will provide updates when appropriate.
Speaker 5: In movement disorders, we initiated the phase 2B, Luma study in Parkinson's disease for BIV 122, a small molecule locked to inhibitor that we are developing in collaboration with Denali Therapeutics.
Speaker 5: LARC-2 mutations result in hyperactivation of the kinase and are estimated to account for roughly 5% of familial and 1% of sporadic Parkinson's disease. 1% of sporadic Parkinson's disease.
Speaker 5: By inhibiting log 2, bib 122 is designed to target an underlying logical pathway implicated in Parkinson's disease. And underlying logical pathway implicated in Parkinson's disease.
Speaker 5: Next is the formal function.
Speaker 5: For this reason, we believe Bib 122 may have therapeutic potential in patients' disease more broadly, both in people with and without pathogenic lock to mutate. Bib 122 may have therapeutic potential in patients' disease more broadly, that locked to video.
Speaker 5: The Luma study is designed to evaluate whether one state's oral BIB 122 administration can slow clinical worsening versus placebo in Parkinson's disease patients without a pathogenic lock 2 variant.
Speaker 5: We also anticipate initiating the Phase III Lighthouse study later this year, designed to evaluate the safety and efficacy of BIP 122 in Parkinson's disease patients with a confirmed lock to pathogenic variant.
Speaker 5: There are roughly 10 million people suffering from Parkinson's disease worldwide and no approved treatments that slow disease progression.
Speaker 5: By inhibiting LARP2, we have the potential to deliver a first-in-class therapy that may significantly alter the course of disease.
Speaker 5: In conclusion, we executed well against our objectives in quarter and continue to prioritize our efforts across both therapeutic areas and programs.
Speaker 5: As Michelle mentioned, we have already made several decisions resulting from this prioritization effort.
Speaker 5: And this is an ongoing process that will be driven by both scientific insights and internal inflection points.
Speaker 5: Looking toward the remainder of 2022, we anticipate several exciting milestones.
Speaker 5: These include the Ranolone regulatory file for both MDD and PPD in the US.
Speaker 5: The face-tree readout of the canemap in Alzheimer's disease.
Speaker 5: and the initiation of mid to late-stage studies in Alzheimer's, Parkinson's and Lupus. In Alzheimer's, Parkinson's and Lupus.
Speaker 5: These are therapeutic areas characterized by significant unmet needs and where Biogen opportunity to deliver first in class best in class therapies to patients.
Speaker 5: I will now pass the call over to Mike.
Speaker 6: Thank you, Priya, and good morning, everyone. I will provide some highlights of our financial performance for the second quarter and an update to our full year 2022 guidance. Please note that all financial comparisons are versus the second quarter of 2021 unless otherwise noted.
Speaker 6: Total revenue for the second quarter was $2.6 billion, which was a decrease of 7% at actual currency with 5% at constant currency. The last quarter was $2.6 billion, which was $2.3 billion, and the last quarter was $2.6 billion,
after looted earnings per share in the sector was $5.25 a decrease of 6%. Total MS revenue, inclusive of Okravis royalties, was $1.7 billion.
increase of 4% at actual currency and 3% at constant currency.
The global tech fader revenue of $398 million decreased 18% at actual currency and 17% at constant currency.
Tech for dare revenue in the US increased versus the prior quarter. However, this was primarily due to channel dynamics and we do expect Tech for dare in the US to decline throughout the year of 2022.
Outside the US, Techfidero was modestly impacted by generic markets such as Canada and Germany. At this point, we are aware of several generic applications that have been approved in Europe , and we will be monitoring the situation closely. Importantly, we were pleased to be granted a new patent in the EU and reserve all rights to assert the patent against infringing general funds. We are also pleased to be able to
but it's possible that you may still at risk.
Global Pemarity Revenue $137 million increased 51% at actual currency and 52% at constant currency. Pumerity continued to grow in the US, and we are pleased with the trajectory. Outside the US, Pumerity has now launched in 14 markets. We are currently working with our contract manufacturing suppliers to address potential supply constraints and, therefore, delayed any additional country launches. And, therefore, delayed any additional country launches.
Multi-sabry revenue with $516 million decreased 2% and actual currency was flat at currency.
In the United States, TISABRI revenue was negatively impacted by modest volume declines partially offset by favorable pricing.
Outside the U.S., we were pleased to see continued patient growth.
We are aware that regulatory filings for a biosimilar referencing Tisabri have been used to both the FDA and the EMA. We will continue to enforce our IP, but a biosimilar could launch upon approval in the US and EU, which could occur next year.
The global interferon revenue of 150 million dollars decreased 13% at accurate currency and 11% at constant currency and was impacted by the continued shift from the injectable platform to oral or high efficacy therapies.
versus the prior quarter interferon revenue increase, 13% at actual currency and 14% at constant currency, primarily due to seasonality and channel dynamics in the US.
Moving to SMA, Global Spinroz are revenue of $431 million of current currency and 11% of constant currency.
In the U.S., we were encouraged to see fewer spin-raza discontinuations during the quarter. Outside the U.S., the revenue decline was primarily driven by competition.
with the timing of shipments in certain markets, price dynamics, and negative currency impacts.
Global Spenraza Revenue Decreased 9% versus the first quarter of 2022 at actual currency and eight at constant currency to have an competition and negative currency impacts outside the US, as well as some seasonality dynamics in the US.
Moving to our biosomers business, revenue of $194 million to climb 4% at actual currency increased 3% at constant currency. Increased 3% at constant currency.
Biosomers volume increases were more than offset by negative currency impact pricing pressure. We continue to expect full year biosomers to decrease.
versus 2021.
We are pleased to have launched BIO-VIS this quarter in the U.S. and we recorded some modest initial revenue due to channel stocking. As a reminder, we expect a gradual launch of BIO-VIS with more meaningful revenue contributions starting in 2020.
Total NICD20 revenue of $436 million decreased 1%. Revenue from Okrovis Royalties increased 14%, which was more than offset by continued retuxing declines due to biosimilar condition.
Now moving on to expense and the balance sheet. Second quarter, non-GAP R&D expense was $529 million, including $18 million in upfront payments related to corporations with med rhythms and electose therapeutics. This is compared to $585 million in the second quarter of 2021, which included approximately $50 million in upfront payments.
non-GAAP SG&A was $570 million, including approximately $29 million related to Agile. This is compared.
is $635 million in the second quarter of 2021.
Second quarter, collaboration, profit sharing was a net expense of $29 million, which includes $58 million of profit sharing expense related to the collaboration with Samsung Bioepis.
partially offset by reimbursement of $29 million from ACI related to the commercialization of Agihelm in the US.
non-GAAP other expense was $29 million primarily driven by interest expense.
Gap Other Income was $429 million, which included two items of note.
First, we recorded an approximately $5 billion gain on the sale of our equity stake in the Samsung Bioepis Joint Venture. In the Samsung Bioepis Joint Venture.
In addition, we recorded $900 million plus estimated fees and expenses related to an agreement in principle to resolve previously disclosed qui tam litigation relating to conduct prior to 2015.
This agreement in principle does not include any admission of liability and is subject to the negotiation of final settlement agreements and documents. We expect to make the payment shortly after the agreements are finalized, which we expect to be as soon as possible and within the next 12 months.
In the second quarter, we generated 737 million dollars in cash flow from operations.
Capital expenditures were $37 million. The capital was $1 million.
We repurchased 2.4 million shares of the company's common stock during the quarter for $500 million.
June 30, 2014 was $73 billion in debt, $5.1 billion in cash and marketable securities, and $1.4 billion in net debt. In July , we repaid our senior notes to September 2022 with an aggregate principal amount of $1 billion. Of note, as of June 30, we analyzed approximately $71 million of work and process inventory related to the account amount. We plan to continue building inventory over the coming months.
And we are also preparing raw materials associated with this production.
If the lecanumab phase 3 study is negative or lecanumab does not receive regulatory approval, we would expect to expense inventory on hand at that time as research and development expense subject to cost sharing with ASI.
Overall, we remain in a very strong financial position with significant cash and financial capacity, including a $1 billion drawn revolving credit facility to invest in growing the business over the long term.
Let me now turn to our updated full year 2022 guidance. We are increasing our full year revenue guidance from our previous range of $9.7 billion to $10 billion to a new range of $9.9 billion to $10.1 billion and increasing our full year non-gapped LUDAPPS guidance from our previous range of $40.25 to $16 to a new range of $15.25 to $16.75.
This guidance increases primarily a result of better than expected top performance and continued cost management.
This guidance assumes that foreign exchange rates as of July 15 will remain in effect for the remainder of the year net of hedging activities.
Importantly, we are raising a revenue APS guidance range as despite some meaningful currency headwinds, which were not included in our guidance at the beginning of the year. Specific subsequent to issuing our most recent guidance on May 3rd, we have experienced a headwind of approximately $55 million to $20 cents to APS through the currency fluctuations from April 29th through July 15th.
This is in addition to a headwind of approximately 120 million to revenue and 35 cents to EPS due to currency fluctuations between January 1st and April 20th.
These currency headwinds are primarily due to strengthening of the US dollar relative to other currencies in which we transact.
This financial guidance assumes continued declines in rituxanin due to biosimilar competition.
as well as continue to really protect federal revenue in the U.S. due to generic entry.
Further, this guidance reflects a range of scenarios for the impact technology in the EU, which is difficult to predict. We are aware of a small number of generics that have launched to date and we are monitoring the situation. We are monitoring the situation.
We assume we will utilize a portion of the remaining share repurchase authorization of $2.3 billion throughout the remainder of the year. Please see our press release for more information.
of the remaining share repurchase authorization of $2.3 billion throughout the remainder of the year. Please see our press release for important and solutions assumptions.
In summary, we continue to execute well across our core business and are pleased to be raising our financial guidance for the year. We remain focused on delivering results and are optimistic about the potential opportunities ahead of us that we believe can create long-term value for shareholders.
We will now open the call for questions.
Thank you. If you would like to ask a question, please start one on your telephone keypad. As a reminder, please limit yourself to one. As a reminder, please limit yourself to one.
If you require any further follow-up, you may press require any further follow-up. You may press star one again to rejoin the queue. Your first question comes from the line of Brian Abrahams with RBC Capital.
Hey, guys. Thanks so much for taking my question and congratulations on the nice quarter. We noticed that, and you discussed this a bit, that you have been discontinuing pipeline programs maybe a little bit earlier on, including 104, 100, and 076. Just wondering if you could maybe comment on that, whether this reflects any change in your philosophy on risk assumption and go-no-go decision with respect to pipeline prioritization and maybe if that might imply
to fit inside.
So I want to specifically pick up on the points that you made about Bib 104. We just shared that we will be discontinuing development of Bib 104, which is an amp up a initiator in CIS, which is cognitive impairment with associated with schizophrenia. And that is because we had a readout from Tally where we saw expected pharmacological exposure, but we did not make the primary or secondary end point.
So we believe that, you know, we have tested the hypothesis really well here, and that it's time to reconsider the data, look at it very carefully, think about other applications, but ensure that we allocate resources to the programs with higher probability of success. So that addresses that question. With BIP 76 that you also mentioned, it's an anti-tow antibody with our partnership with Neuromune, and we did announce that we are going to have a very high probability of success in the next five to ten years. So we believe that we have tested the hypothesis really well here, and that it's time to reconsider the data, look at it very carefully, think about other applications that we have identified,
that we are closing down development at biogen for it. So I would ask that you direct further questions of next steps on BIP 76 to new immune. But from our perspective, we are focusing for example on BIP 80, which is our anti-sensile ego nucleotide that affects all post-translational forms of tau. And we will be starting a phase two late stage mid stage trial later this year.
So that's how we're thinking about our prioritization. And finally to address what it does for our bar on Alzheimer's, I'll just say that we look forward to the results of Clarity AD for the Cannemab. It is a well-powered, well-designed trial. It has, we believe, the right primary endpoint in CDR some of boxes. And we think that a statistically significant difference versus placebo would be clinically meaningful.
because of the instrument that's being utilized as a primary endpoint and also all the secondary endpoints. And in addition, we have a whole comprehensive program around the LACANIMAB, which addresses, you know, pre-symptomatic patients as well as we're looking at maintenance along with ESI and phase two open label extension and subcutaneous. So I think we will just wait for the data. As we have said, you know, we expect to complete the filing along with clarity AD should be positive by Q1 2023.
So I hope that answers the question. Thank you. And if I may add, we are delighted to be progressing with the filing of Zoran Olon and LECA and waiting more data also for ADIU. For the earlier pipeline, we have expanded materially our pipeline. It's natural that first of all there is inherent risk with neuroscience and it's natural that we always try to increase the reach of success and select based on trigger point and science inside and this is what PREA is doing.
We'll take our next question from Matthew Harrison with Morgan Stanley .
Great. Good morning. Thanks for taking the question. I just wanted to follow up on Lecanumab. So I guess the key question that I've been getting a lot is, you know, in the discussions with the FDA around using a single confirmatory study here, do you have explicit feedback from the regulators on the on the p-value necessary here or is that going to be a review issue? Thank you.
Yeah. Thank you, Matthew. So just a step back, you know, Lecana Mab has completed, you know, is in the filing for Accelerated Approval Pathway using the Phase II study, which is the 201 study. And we are expecting results for Clarity AD, which is the Phase III study. This is a study with 1795 subjects. It's a global study. We believe it's well powered.
There is no interim or futility analysis. It will be just a primary readout sometime in the fall of this year, 2022. And currently, this has an underrepresented population also, quite similar to the CMS population of about 25% included. Now, with regards to whether it can be a conformatory study for traditional approval, yes.
We do believe we have this agreement that should it read out positive. It can be the confirmatory study. So I do believe that that is exactly what we believe. In addition, I'll just remind us that in the adicanumab briefing document, the FDA had stated that they would accept a statistically significant change on an inherently meaningful instrument such as the CDR sum of boxes as evidence of a clinically meaningful effect. But this is really important.
And we feel quite confident that CDR sum of boxes is the right primary endpoint. It is clinically validated and it combines both cognition and function and is widely accepted as a registration endpoint.
So we are at that point, we feel quite good about the fact that it's well powered. Of course we have to wait to see the results.
I hope that answers the question.
Thank you. We will take our next question from Colin Bristow with UBS.
Hey, good morning and congrats on the quarter. So just on the CEO's search, would you give us an update on where you are in this process? And if you're able to now provide a timeline? And just within that question, given how important the Kana Mav is to the company and the trajectory, is it reasonable to expect that a new CEO would not be in place until after the outcome of the trial is known? Thanks.
Thanks for the question from my discussion earlier this week with board members and our chairman. I hear that the search is progressing as planned, but at this stage, there is nothing yet to be reported. And obviously, we not speculate on Le Canemas, but it's a very important event, but at this stage, nothing more to report. And I'm sure that we are going to be able to report on Le Canemas. And we report. And we report.
Thank you. We'll take our next question from Michael Yee with Jeffries.
Hey, thank you. I had a question around. Thoughts around investment into and how that works for. Like, and whether there's a decision point as to your commitment to have to reimburse 5050 and how that works. If the drug actually gets to market, and then secondly, as that relates to your, your animal on same thing, is that a proposed net. Investment spend for 2023, how do I think about that? Thank you.
Yeah, so both of those arrangements are 50-50, so you would expect that we certainly will be building infrastructures to support, hopefully the successful launch of both of those products and we share costs in both cases 50-50. So we're very focused on managing our op-X, currently the 2022 guidance implies a midpoint of about 4.6 billion versus 5.2 last year for progressing well in the cost measure.
We intend to approach the Lecannama B3 data set if the primary endpoint does not work, but a secondary like adcoms or A-S-COG or perhaps a subgroup like A-PWE4 carriers is active. And how would that impact your FDA submission?
Thank you, Omar. So maybe I can step back to say that, you know, we obviously are several scenarios of the data readout.
And I think at one end, we have potentially a positive primary end point outcome with secondary end points as well. And we believe that the totality of the data will be really important. And as I said already, we have discussed this and we have agreement with the FDA that a positive VDAP could serve for a confirmatory study.
And on the other end of the spectrum, it's possible that the study is negative. And in that scenario, we would be looking at also the other readouts because there are two, these are obviously biogenesci readouts, but I will also draw attention to the fact that we have two other anti-amaloid agents reading out in the near term. One is Gantranumab and the other is Dhananumab as everyone knows. So really, this is a bigger question about these readouts and what they mean.
for the anti-amoloid hypothesis early Alzheimer's disease.
There could be several mixed scenarios, some like you mentioned. And I think it will be very difficult to speculate exactly how that might be perceived. So I would say that the mixed scenario, there could be several permutation combinations. But I think that the totality of the data is going to be important.
So at this point, it would be tough for me to speculate on what mix scenario and what outcome it could lead to. But we are considering all of this. And I think currently our focus is on ensuring that we, you know, collect the data, close the study, have the have a very clear readout. And then we will be engaging, of course, with the FDA, because this product also has breakthrough and fast track designation, which allows us to consult the FDA for the guidance.
So we will be in close contact and that's what I can tell you. Thank you.
Thank you. We'll take our next question from Mark Goodman with SVB Securities.
Yes, good morning. You keep referring to the growth opportunity in emerging markets. Can you just help us size, how big is the business? How has it been growing? What are the key products that are growing there? What are some products that have yet to launch there? That's in the pipeline that can be look forward to growth there and just give us a sense of where this business is going to be in three, four years. Thank you.
So before Mike gives the provides more color.
The important element is that the epidemiology is pretty similar in these in the West, in emerging metro markets, so our portfolio is very relevant to this part of the world.
The second point is that we see a very strongly emerging middle class.
that is able to afford, able to copay and is willing to access best education and health care.
And the experience we have so far with our expanded footprint since the few years in Latin America, in Asia-Pac, in the Middle East, is that we see a very good uptake of our MS portfolio, even if we thought that the outset that in Asia-Pac it was a bit lower incidence, but based on the number of the population, these are very sizable opportunities. We see a very good uptake and also for a spin-rather.
So good opportunity. We have a professional team. Compliance is very important everywhere, but also in this part of the world. So we're secure that we have a very good balance between where Biogen is directly and where Biogen is partnered. But we have a very good performance to date with a strong double digit momentum. Mike? Yeah, not a lot to add Mark. I would say that, you know, we're pleased with a couple of markets that I would call out one being China, the other being Brazil.
In particular, China, we're seeing excellent uptake on Spinraza. It's not a huge revenue contributor due to pricing dynamics there, but I think overall, you know, the majority of our international growth has been around SMA, but as Michelle said, there's opportunity MS as well. And you know, that's something that's gone from a very small revenue base to a, you know, a respectable number as we sit here in 2022 and growing in the years beyond. So we're hopeful that we can continue to grow.
We are very encouraged by the data. I'm delighted to see the second study in Postpartum, fourth study in major depressive disorders. We have the opportunities to meet many constituency and this disease is affecting so many people. So it's so relevant. If I'm not mistaken, the US won't have 19 million as that pre-asset an incidence for PPD close to half a million every year.
So extremely relevant. We are making a lot of progress on the positioning, on understanding the patient journey and the different segments of the market between the naive and the failures to treatment the way we know in this massive market due to side effect or lack of efficacy.
I hope that in the near future will have an opportunity to gather with Sage.
to have a dedicated session with you to update you on where we stand and we'll come back to that as soon as we can. Concerning the price, we are not yet there. We are making some of our homework but nothing to add yet at this stage.
I can address the scheduling question. Thank you, Daldin. So I just wanted to say that if we step back, you know, the DEA process is quite robust. And they will, this is typically takes about three months at the end of the approval process. And they will designate a schedule.
Now, Sage has already completed their human abuse liability potential study, as I mentioned, in my opening comments. And they could potentially be five schedules that you could get. At present, what we do know is the data that we have, and we also have the background of the wrestle, which is a scheduled for drug. So at this point, we do believe that it is possible for Zoranelone to get a scheduled for.
Schedule 4 is typically what it means is low potential for abuse and low risk for independent.
The other drugs in this category are Adeban, Xanax, Darvacet and others. And we believe that this is currently the expected scheduling. Of course we have to wait to go through the process to see what the outcome will be, but that's what we expect at the moment.
in this category are Adyvan, Xanax, Darvacet and others. And we believe that this is currently the expected scheduling. Of course, we have to wait to go through the process to see what the outcome will be, but that's what we expect at the moment with the data we have.
I hope that addresses it. Thank you. Thank you. We'll take our next cram robin, Parnacus with tourist securities.
All right, thank you guys for taking my question.
Sorry, I'm losing my voice. So I know you've talked a lot about staying within the current pillars of neurology and maybe also immunology. I was just wondering, you know, if you think about de-risking the portfolio and maybe going outside those pillars, what are your current thoughts about that now, given you've had three months to think about it? And then I guess the question that goes along with that is, would you make that decision after you'd hire the final head of R&D and CEO ? Thanks.
I can get started. Thank you for the question. So just stepping back, we have at BioGen, we've got a vision towards a multi-franchise portfolio.
And R&D, our pipeline, I believe is quite strong and diversified and robust. We have 29 programs in the clinic, many more in our discovery and exploratory portfolio where we look at the diseases that we want to be leaders in. And we think about the targets and the biological pathways that we may want to address with our platform, actually of multiple modalities. So that's the other.
Strength we have, we could be agnostic to modality because we have access to biologics, small molecules, antisense oligonucleotides, as well as gene therapy. So that's sort of at a high level. That's how we think about our R&D portfolio. Now within that, you spoke about neuroscience. This is an absolute core strength that we have. It's a very hard space, I would acknowledge. I think we would all acknowledge it, but we've had a lot of success in this space.
both with multiple sclerosis as well as with spinal muscular atrophy. And potentially we could have success with Alzheimer's and certainly we have run alone in depression.
So we are thinking about this as neuroscience, potentially increasing our focus in neuropsychiatry where we've got now a product that is in filing for both MDD and PPD with a large high unmet need. And we are looking at other potential indications for the GABA pathway that ziranolone addresses. So ziranolone could really be much more than just MDD and PPD. And we're looking at that as well in our portfolio prioritization. So that's that.
Shifting over to specialized immunology, we have three phase three trials and this is really important with two products. So we have our homegrown BIP59, which where we understand the biology and the pathway really well, we think it could be first in class, best in class for CLE, cutaneous lupus erythomatosis, but also for SLE. And then we have DAPI with our collaboration with UCB, also in phase three.
So this is a comprehensive sort of portfolio, just an SLE and CLE. Then again, we are thinking about where else do we understand the type one interferon signature? Where else could we have potential indications with BIP-59, for example, in other specialized immunology indications? That's our core focus currently. And then finally, I'll say that within neuroscience, we think we can be leaders in Alzheimer's, depression.
and retain our leadership in MS and Spinraza SMA. We have already, you know, discussed externally our opt-in for BIB115, which is a follow-on ASO with potentially a once-a-year dosing. So that could really be very, very important. We are accelerating that as much as we can. And we have MS, where we continue to think of BTK inhibitors.
So we have a peripheral BDK in the weather, we also have a central BDK in the weather and we will continue to look at the emerging data and make decisions.
Beyond this core, R&D portfolio, as Michelle mentioned, we also have our biosimilals and our digital therapeutics. We've just made a foray with med rhythms. And I think that this to get all together is a very diversified portfolio. The area that we've increased a lot of focus is as soon as we have, for example, we had the bit 104 readout. We're now thinking of what else we would do with that glutamurgic.
pathway and the data that we will gather from there. Similarly, with BIP 59 and Zuranalone, as I mentioned, how would we allocate resources to that? What would we prioritize? So we are doing this in a very systematic fashion and it's a call out to the R&D and the entire one-videon team to really be doing this very well. I hope that gives you a flavor of how we are approaching it. Thank you, Priya. And to bring that...
Similarly with BIP-59 and Ziran alone, as I mentioned, how would we allocate resources to that? What would be prioritized? So we are doing this in a very systematic fashion and it's a call out to the R&D and the entire One Biogen team to really be doing this very well. I hope that gives you a flavor of how we are approaching it. Thank you Priya. And to bring that together. Thank you.
What is very important for us to set this strategic direction is to clearly understand the key capabilities that we have within the company throughout the value chain, from the early research clinical development throughout the commercialization and customer engagement.
As Priya said, today we believe that we are pretty well diversified compared to where we were six years ago in neuroscience, in specialized immuno, in biosimilars and emerging digital therapeutics capability. We have 29 programs, 10 in phase 3 of our products. The question is how do we deal with the risk in addition? And this is what Priya started to work on. Obviously, a new CEO and a permanent head of R&D will have an opportunity to revisit this strategy together with the board.
data, and is the FDA given any indication if they convene an ADCOM for this initial application? Thanks.
Thank you, Corey. So firstly, I think that just a step back, we have filed according to the accelerated approval pathway with the phase 2 data as you mentioned, Corey. And the date for that is January 6, 2023. Now clarity 80 will read out in the fall of this year. And should it be positive, it will be the filing for traditional approval will be completed per what EISI has communicated by the end of the first quarter.
Thank you. We'll take our next question from Jay Olson with Oppenheimer.
Oh, hey, good morning and thank you for the update. Can you talk about why Bid 104 did not meet the primary or secondary endpoints in the phase two tally trial? And would you consider Bid 104 for study and other indications? Thank you.
Thank you, Jay. Great question. So, yes, we are very disappointed with the negative readout for BIB104. And just to step back, the hypothesis that we were testing was that AMPA potentiation can impact NMDA hypofunction, NMDA receptor hypofunction, and thereby increase synaptic connectivity and increase the, you know, working memory domain, impact the working memory domain.
And this was a 12 week readout. So we have looked at that and we have quite, we feel quite confident that this was a very high, highly compliant trial where we have expected exposures for bit 104 through the 12, through the 12 week duration. So we believe that we have tested the hypothesis of ampere potentialization leading to NMDA potential, potentialization as well. Having said that.
We think that this was an extremely well-run trial, and we have collected a very rich data set that can give us leads on how we might want to pursue the glutamergic pathway in other neuropsychiatry indications. So, yes, that is something that we are looking at very carefully, and we will be evaluating this very carefully. You know, we did have early phase one trials, but that data was unfortunately not......
replicated. Now these were very small trials. One was, you know, in healthy volunteers and the other one was in schizophrenia patients, but they were shorter duration and the subject numbers were 39 and 29 respectively. So very small trials. So yes, to your question, neuropsychiatry remains an area of high focus. We believe we've increased our capabilities and focus in this area and will continue to look at this very high quality data set.
and we'll also be presenting it at upcoming medical meetings. Thank you. We have a question from Phil Nadeau with Cowen.
Good morning. Thanks for fitting us in. A follow-up to Corey's question, but directed specifically at Mike. Mike, how does Biogen feel about putting resources behind the Canemab launch? What would be the timing of an infrastructure build and a true launch of the product? Would it be after accelerated approval, after full approval, or it does seem like now there's another step with an NCD likely to come at some point? When would Biogen feel comfortable in really investing in the commercial infrastructure for this program? Great.
So before Mike Jantin, I would like to say that we work in full and close collaboration with our partners at this site.
that we are approaching a global launch, not suddenly a US launch, and we anticipate the filing in Japan and EMA to take place during the first half of 2023. So this will be a global launch. And obviously, as we know, there is a sequential process here between an accelerated approval and a potentially full approval after that.
Yeah, I think Michelle covered a lot of it in terms of the question, Phil, but I would just say that, you know, as a reminder that we in ACI expect the phase 3 readout for the Canama in the fall of 2022. The date is in early January of 23.
As you know, as currently written, the national coverage determination does significantly limit the market opportunity for antibodies with accelerated approval. And so, as Michelle said, we will closely align with ASI to resource appropriately. We'll take learnings from Agilem as necessary and where we can. And we'll resource it at each phase of its commercialization. For more information, visit www.agilem.com
very gradually as as Lecannamab is launched. I'd say that obviously we did make the decision to take down the Agilem commercial infrastructure because we caught the time gap was too large. This is very important.
to the timing of when we would need it for Lecana Mab. And I think that that was the right decision. We feel like we can rebuild the infrastructure in a more gradual fashion and fairly quickly when we're ready. And again, that's something that will partner very closely with ASI on. I think that it will very much be dependent on the quality of the data.
Is the data clarifies and confirms without any ambiguity that removing the plaque is correlated with the slowing down of a cognitive decline and reinforces the hypothesis, I think arrows with a line faster than what we believe.
Yeah, and the other thing to remember here, this is purely from an accounting standpoint, and it ties back a little bit to the question that Mike E.S. earlier, just as a reminder, all of the revenue costs, everything will be aggregated, and our 50% share will be reflected as a one-line revenue item for the Canada. This is a one-line revenue item for the Canada.
Thank you. We'll take our next question from Jeff. Meet him with Bank of America. We'll take your next question.
Hey guys, thanks so much for the question. Just wanna follow up on some previous questions on Ritana and you guys have talked about the US opportunity already. But how much of a discussion have you had with EU or Japanese regulators just on the risk benefit bar? I wasn't sure if your prior discussions from Agi were able to give you some insight there. Thank you. Thank you, Jeff. So, ESAI has communicated that they will be completing the filing in both.
communicated and we have communicated previously that they have been part of a prior consultation process. Now the prior consultation process in Japan has the ability to really expedite the review process should the data be positive. So that's also taken place. So although everything is on track to complete the submission benefit risk will always drive the discussions.
And we believe that the trial is set up from well-powered and well-designed to give us an answer on a clinically validated instrument. So we believe that it is set up well. We of course, the rest will depend on the data.
Thank you. We'll take our next question from Evan Segerman with Bank of Montreal.
Hi guys, thank you so much for taking the question. Just looking ahead to the Clarity AD trial, what do you think CMS needs to see from that trial to potentially revise the NCD? I know there's a lot of discussion on the call, but I'm wondering is that sufficient to essentially open up access in the Medicare population? Thank you. Thank you, thank you so much.
Thank you, Evan. So I think that before we kind of, before I answer that directly, it would be important for us to kind of reiterate that the final NCD indicated that antibodies with full approval may be covered in CMS approved prospective comparative studies. And the fact that this data could be collected in a registry. Now, what is left open to interpretation here is their next point that they made.
which is that the degree of rigor in these study designs may depend in good part on the strength of evidence of the initial randomized controlled trials that led to FDA approval.
This aspect we feel quite good about because we think that the trial is well designed and well set up and well powered to give us a readout. So we believe that if the trial reads out positive, that is the clarity AD, that there would be a chance that it would meet the high level of evidence bar that CMS has put forward in the NCD and that they could potentially reconsider for full coverage.
The other aspect to consider here is that there are two other readouts coming in the same sort of time frame, which could also influence.
how CMS looks at their guidance and what they designate as a high level of evidence. So it's not clear to us at this point, but it will depend on each molecule. Phase 3 data is my personal interpretation on this. Now, as Esai has announced, you know, Clarity has a robust design, and they believe that it could meet the high level of evidence set forth by CMS in the NCD memo. So we do think that it could be reconsidered.
And I think the high level of evidence would have to include safety efficacy underrepresented population that mirrors the CMS population. In addition, I would say that the population in the clarity AD also has comorbidities and concomitant medications not very dissimilar from the CMS population. So I think these things set us up well and they both well. I think final outcome will depend on the data.
And to add to what Priya said, beyond the solid design, there is an open-label extension that will add some information. There is also a pre-clinical trial ongoing for the earlier population. And last cycle management opportunities with new subcreteness formulation also on the way.
And that will conclude our call today. Thank you, everyone, for joining us. Thank you, everyone, for joining us.
That will conclude today's call. We appreciate your participation. You may now disconnect.