Q1 2024 Biogen Inc Earnings Call

Please standby.

Jennifer: Good morning. My name is Jennifer, and I will be your conference operator today. At this time, I'd like to welcome everyone to the Biogen First Quarter 2024 Earnings Call and Business Update. All lines have been placed on mute to prevent any background noise.

Jennifer: Good morning, My name is Jennifer and I will be your conference operator today at this time I'd like to welcome everyone to the Biogen first quarter 'twenty 'twenty four earnings call and business update.

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

Jennifer: After the speaker's remarks, there will be a question and answer session. If you'd like to ask a question during this time, simply press star 1 on your telephone keypad. Please limit yourself to one question to allow other participants time for questions.

Speaker Change: After the Speakers' remarks, there will be a question and answer session. If you'd like to ask a question. During this time simply press star one on your telephone keypad.

Speaker Change: Please limit yourself to one question to allow other participants time for questions.

Jennifer: If you require any further follow-up, you may press star 1 again to rejoin the queue. Today's conference is being recorded. Thank you. I would now like to turn the conference over to Mr. Chuck Triano, Head of Investor Relations. Mr. Triano, you may begin your conference.

Speaker Change: If you require any further follow ups you May press star one again to rejoin the queue.

Speaker Change: Today's conference is being recorded.

Speaker Change: Thank you I would now like to turn the conference over to Mr. Chuck Triano head of Investor Relations. Mr. Try I know you may begin your conference.

Chuck Triano: Thanks, Jennifer. Good morning, good afternoon, good evening, everyone, and welcome to Biogen's first quarter 2024 earnings call. Before we begin, I'll remind you that the earnings release and related financial tables, including our GAAP financial measures with the reconciliation to the GAAP and non-GAAP financial measures that we will discuss today are in the investors section of Biogen.com. Our gap financials are provided in tables one and two, and table four includes a reconciliation of our gap to non-gap financial results.

Chuck Triano: Thanks, Jennifer Good morning, Good afternoon, good evening, everyone and welcome to Biogen's first quarter 2024 earnings call before.

Chuck Triano: Before we begin I'll remind you that the earnings release and related financial tables, including our GAAP financial measures with the reconciliation to the GAAP and non-GAAP financial measures that we'll discuss today are in the investors section of Biogen dotcom.

Chuck Triano: Our GAAP financials are provided in tables, one and two and table. Four includes a reconciliation of our GAAP to non-GAAP financial results, we believe that non-GAAP financial results better represent the ongoing economics of our business and reflect how we manage the business internally we.

Chuck Triano: We believe that non-gap financial results better represent the ongoing economics of our business and reflect how we manage the business internally. We have also posted the slides on our website that will be used during this call. I point out that we will be making forward-looking statements which are based on our expectations. 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.

Chuck Triano: We have also posted slides on our website that will be used during this call.

Chuck Triano: I point out that we will be making forward looking statements, which are based on our expectations. These statements are subject to certain risks and uncertainties and our actual results may differ materially.

Chuck Triano: I encourage you to consult the risk factors discussed in our SEC filings for additional detail.

Chuck Triano: On today's call, I'm joined by our President and Chief Executive Officer, Chris Viehbacher; our Head of North America, Alisha Alaimo; our CFO, Mike McDonald; and Dr. Priya Singhal, Head of Development, is with us and will be available for the Q&A session. Chris, Alisha, and Mike will each make some opening comments, and then we'll move to the Q&A session. To allow us to get through as many questions as possible, we kindly ask that you limit yourself to one question. With that out of the way, I'll now turn the call over to Chris.

Chuck Triano: On today's call I'm joined by our President and Chief Executive Officer, Chris Viehbacher, Our head and President of North America, Alicia a limo.

Chuck Triano: Our CFO, Mike Mcdonnell and Dr. Priya Singhal head of development.

Is with us and will be available for the Q&A session.

Yes, Alicia and Mike will each make some opening comments and then we'll move to the Q&A session until out to allow us to get through as many questions as possible. We kindly ask that you limit yourself to one question.

Chuck Triano: With that out of the way I'll now turn the call over to Chris.

Christopher A. Viehbacher: Thank you, Chuck. Good morning, everybody.

Christopher A. Viehbacher: Thank you Jack.

Christopher A. Viehbacher: Everybody.

Christopher A. Viehbacher: Well, it is certainly great to be able to announce earnings per share growth in our first quarter. This is the first time in several years that the underlying business performance of Biogen has allowed us to actually demonstrate earnings per share growth, and that's a major achievement. We've clearly still got a lot of work to do, but I think it feels like we're turning the corner in the company. And with that, I'd actually take the opportunity to thank my Biogen colleagues.

Christopher A. Viehbacher: It is certainly great to be.

Christopher A. Viehbacher: To be able to announce earnings per share growth in our first quarter.

Christopher A. Viehbacher: This is the first time in several years that the underlying business performance of Biogen has allowed us to actually demonstrate the earnings per share growth.

Christopher A. Viehbacher: That's a that's a major.

Christopher A. Viehbacher: Achievement.

Christopher A. Viehbacher: Clearly still got a lot of work to do but.

Christopher A. Viehbacher: I think Phil.

Christopher A. Viehbacher: It feels like we're turning the corner in the company and with that I'd like to actually take the opportunity to thank my Biogen colleagues, we have instituted an awful lot of change within the company.

Christopher A. Viehbacher: We have instituted an awful lot of change within the company, and I'd like to thank them for their commitment, passion, and patience throughout this process. But I think you're seeing some of that change that has occurred now in the numbers. We have tried to bring a lot more focus and discipline to really putting our resources behind those things that do good and drive value. And one of the things that you may not see is that there is an awful lot of reinvestment going on. One of my early bosses in my career once told me, "You can't save your way to prosperity in this business."

Christopher A. Viehbacher: And I'd like to thank them for their commitment passion and patience throughout this process.

Christopher A. Viehbacher: But I think youre seeing some of that change that has occurred now in the numbers.

Christopher A. Viehbacher: We have tried to bring a lot more focus and discipline to really putting our resources behind those things that do good and drive value.

Christopher A. Viehbacher: And one of the things that you may not see is that there is an awful lot of reinvestment going on.

Christopher A. Viehbacher: One of my early buses and in my career. Once told me you can't save your way to prosperity in this business and that is absolutely true.

Christopher A. Viehbacher: And that is absolutely true, but that's not really what we set out to do. The Fit for Growth project, which is, as you can see from the numbers, on track to achieve its $1 billion in growth savings and $800 million in net cost savings, and, by the way, $800 million of increased cash flow as well, by the end of 2025. But what we really tried to do was redesign the organization. We have been so focused as a business for decades on our multiple sclerosis franchise.

Christopher A. Viehbacher: And that's not really what we set out to do the fit for growth project, which is as you can see from the numbers on track to achieve its $1 billion in gross savings and $800 million and net cost savings and by the way a $100 million of increased cash flow as well by the end of 2025.

But what we really tried to do was redesigned the organization. We have been so focused as a business for decades on our multiple sclerosis franchise.

Christopher A. Viehbacher: Here we are launching four first-in-class new medicines, and we really needed to make sure we're supporting those launches. And in fact, despite the cost reductions and margin improvements that Mike's going to go into in more detail, but behind that, there are hundreds of millions of dollars being invested in new launches. This focus has actually enabled us to increase the investment in those assets where we have the most conviction. So this is much more than a cost-saving exercise.

Christopher A. Viehbacher: Here, we are launching for first in class, new medicines, and we really needed to make sure we're <unk>.

Christopher A. Viehbacher: Supporting those launches and in fact, despite the the.

Cost reductions and margin improvements that Mike is going to go into in more detail, but behind that there are hundreds of millions of dollars being invested in new launches and while arm.

Christopher A. Viehbacher: Overall expense in research and development has decreased.

Christopher A. Viehbacher: This focus has actually enabled us to increase the investment in those assets, where we have the most conviction. So this is this is much more than a cost savings exercise this had been a redesign and.

Christopher A. Viehbacher: This has been a redesign and a change in our culture to a degree. So, you know, let's look at some of these new launches. And obviously, the one that everybody's most interested in is Lakembi.

Christopher A. Viehbacher: And a change in our culture to a degree.

So, let's let's look at some of these.

Christopher A. Viehbacher: New launches and obviously the one that everybody is most interested in is can be and if we can move to that slide.

Christopher A. Viehbacher: And if we can move to that slide, you know, you can look at this in a number of different layers. Obviously, first, we're seeing really good quarter-on-quarter trends. You know, as you've seen, the number of patients on the drug has increased two and a half times compared to where we finished the fourth quarter. Our in-market revenue almost tripled in Q1 versus Q4 of last year, and that's obviously important. But, you know, the thing that is really important to me as I look at this is not so much just that.

Christopher A. Viehbacher: You know you can look at this in a number of different layers, obviously first.

Christopher A. Viehbacher: Seeing really good quarter on quarter trends.

Christopher A. Viehbacher: As you've seen.

Christopher A. Viehbacher: The number of patients on drug as increased two five fold compared to where we finished the fourth quarter.

Christopher A. Viehbacher: Our end market revenue almost tripled in Q1 versus Q4 of last year and.

Christopher A. Viehbacher: That's obviously important but.

Christopher A. Viehbacher: The thing that really.

Christopher A. Viehbacher: It is important to me as I look at this is is not so much just that.

Christopher A. Viehbacher: You know, I've been in this business, you know, for three and a half decades; I've lost count of how many launches I've seen. But this is an extraordinarily difficult launch, really, because the amount of change that physicians are facing with this is really profound. And as I go around to hospitals and talk to doctors and talk to those who are seeing other doctors, it really becomes evident that there are an awful lot of challenges to getting even that first patient on treatment. You know, we are just one hospital.

Christopher A. Viehbacher: I've been in this business.

Christopher A. Viehbacher: Three and a half decades, I've lost count of how many launches I've seen.

But this is an extraordinarily difficult launch really because.

Christopher A. Viehbacher: The amount of change that physicians are facing with this is really profound.

Christopher A. Viehbacher: And as I go around to hospitals and talk to doctors and talk to those who are seeing other doctors. It really becomes evident that there are enough a lot of challenges to getting that even that first patient on treatment.

Speaker Change: We are a one hospital.

Speaker Change: It was going to take it took them three months to get approval just to hire a nurse to help navigate the system.

Christopher A. Viehbacher: It was going to take three months to get approval just to hire a nurse to help navigate the system. At another major medical center, they were having to develop a five-year business plan just to be able to access the infusion bed. And when you look at some of the uncertainty around PET scan reimbursement, and although CMS had clarified that, a lot of the MACs had pulled it through, there was still a lot of difficulty getting that clarity all the way through the system.

Speaker Change: And another major medical center, they were having to develop a five year business plan just to be able to access the infusion beds.

Speaker Change: And when you look at it.

Speaker Change: Some of the uncertainty around pet scan reimbursement and although CMS clarified that and a lot of the Max had pulled it through there was still a lot of difficulty getting that clarity all the way through the channel.

Speaker Change: And.

Christopher A. Viehbacher: And, you know, what I'm really encouraged by when I look at these numbers is that although there are a lot of challenges, it's a lot of time investment for physicians. And I think a lot of those physicians, to their credit, are investing that time and not necessarily getting reimbursed for that. But they're getting it done.

Speaker Change: What I'm really encouraged by when I look at these numbers is.

Speaker Change: Although there are a lot of challenges, it's a lot of time investment for physicians.

Speaker Change: A lot of those physicians to their credit are investing that time and not necessarily getting reimbursed for that.

Speaker Change: But they're getting it done they're overcoming these challenges and barriers.

Christopher A. Viehbacher: They're overcoming these challenges and barriers, and that is, I think, what is so important. They see the need when they look at patients who are ordinary people loved by their families and seeing this dreaded disease pull them away from that on a day-by-day basis. So I do think we are seeing an awful lot of momentum here, and again, I think there's an awful lot of credit to the neurologists and to these centers for overcoming these challenges, and I think that is going to allow us to continue to see quarter-on-quarter growth It may not be completely linear, and Alisha will go into more detail on that, but it takes time to get these protocols in place.

Speaker Change: And that is I think what is so important they see the need when they look at patients who.

Speaker Change: And accomplished people who are loved by their families and seen this dreaded disease pull the patient away from that on a day by day basis. So I do think we are seeing an awful lot of momentum here.

Speaker Change: And again I think there's an awful lot of credit to the neurologist into these.

Speaker Change: Centers.

Speaker Change: To overcoming these challenges and I think that is going to allow us to continue to see quarter on quarter growth. It may not be completely linear.

Speaker Change: And Alicia will go into more detail on that but.

Speaker Change: It takes time to get these protocols in place.

Christopher A. Viehbacher: And even when you get the first patient, there's been a tendency to let's have a handful of patients so we get comfortable with the system. But then once they've done all that, then we're starting to see volume pull through. And one of the interesting things about this launch is that, generally, we look at revenue as a surrogate for demand. And here, that linkage is not quite so clear because it has taken this upfront time before you see revenue pull through. And I think that's one of the other things we're now seeing in this first quarter is that we're actually seeing a little bit more of that linkage between demand and revenue.

Speaker Change: And even when you get the first patient there has been a tendency to let's have.

Speaker Change: Handful of patients. So we can get comfortable with the system.

Speaker Change: Then once they've they've done all of that then we're starting to see volume pull through and one of the interesting things about this launch is that generally we look at revenue as a surrogate for demand.

Speaker Change: Okay.

Speaker Change: That linkage is not quite so clear because it has taken this upfront time before you see revenue pull through and I think that's one of the other things. We're now seeing in this first quarter is that we're actually seeing a little bit more of that linkage between demand and.

Speaker Change: In revenue.

Christopher A. Viehbacher: And, you know, behind all of this, once those processes are in place, once physicians are ready, there's clearly an underlying demand behind that. So I think that has given us a lot of confidence to now invest more. We have a 30 percent expansion in our U.S. Field Force plan.

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Speaker Change: Behind all of this once those processes are in place and once physicians already there is clearly an underlying demand behind that so I think that has given us a lot of confidence to now.

Speaker Change: Thats more.

Speaker Change: A 30% expansion in our U S field force planned, but I would also say this is a launch that really didn't start until first of September.

Christopher A. Viehbacher: But I would also say, you know, this is a launch that really didn't start until the 1st of September. And even then, you could argue we weren't fully in the mode of being able to launch because the PET scan reimbursement hadn't been cleared. But, you know, our U.S. teams for both H.I.

Speaker Change: And even then you could argue we werent fully in the mode of being able to launch because the pet scan reimbursement hasnt been cleared.

Speaker Change: But our U S teams.

Speaker Change: For both ASI and Biogen has done an awful lot of work to look at the data from the first seven months of the launch and really we're now looking at redeploying some resources here and there as we see what's important and what's not.

Christopher A. Viehbacher: and Biogen have done an awful lot of work to look at the data from the first seven months of the launch. And really, we're now looking at redeploying some resources here and there as we see what's important and what's not. I think the teams are really working well together.

Speaker Change: I think the teams are really working well together.

Christopher A. Viehbacher: And, you know, we have a number of new elements in our promotional mix that will start to come into play as we progress through the second quarter. From a Biogen point of view, I think it's too early to put out any forecasts. We'll be looking at those Month over month, new patient starts, and the increase in revenue, but I would certainly say I'm extremely encouraged by the progress that has occurred. If I could switch gears to another key growth driver, which is Sky Claris, And Alisha again; we'll go into more detail.

Speaker Change: And we.

Speaker Change: We have a number of new.

Speaker Change: Elements of our promotional mix that will start to come into play.

Speaker Change: As we progress through the second quarter so.

Biogen: From a biogen point of view I think.

Speaker Change: It's too early to put out any forecast, we're going to be looking at those.

Speaker Change: Month over month, new patient starts in the <unk>.

Speaker Change: And the increase in revenue, but I would certainly say im extremely encouraged by the progress that has occurred.

Speaker Change: If I could switch gears to <unk>.

Speaker Change: Another key growth driver, which is sky claris.

Speaker Change: And Alicia again will go into more.

Christopher A. Viehbacher: And I think also just show investors how we're progressing versus other analogs. Because the rare disease market doesn't behave so typically, as in other markets, there's always a catch-up population in rare diseases. And so it takes a while for that catch-up population to work through the system and then look at what the underlying demand is.

Speaker Change: More detail and I think also just show investors, how we're progressing versus other analogs because the rare disease market doesn't behave so typically as in other markets. There is always a catch up population.

Speaker Change: Rare disease.

Speaker Change: And so it takes a while for that catch up population to work through the system.

Speaker Change: And then have a look at what's the what's the underlying demand.

Christopher A. Viehbacher: Remember that these are not patients sitting in waiting rooms and that there is a huge amount of work that goes into finding patients. And I think that is actually one of Biogen's strengths. That's, I think, what gives me the confidence to continue to invest more because I do think there is know-how within Biogen. And that's one of the reasons we want to build out a rare disease franchise. But, you know, we've got 1,100 patients now on therapy in the US. That's a really significant number.

Speaker Change: Remember that these are not patients sitting and waiting rooms.

Speaker Change: And that there is a huge amount of work that goes into finding patients and I think that is actually one of Biogen strengths. That's I think what gives me the confidence to continue to invest more because I do think there is a knowhow within biogen.

Speaker Change: And that's one of the reasons, we wanted to build out our rare disease franchise, but we got to 100 patients now on therapy in the U S.

Speaker Change: Really significant number.

Christopher A. Viehbacher: But I'm also really encouraged by the launch in Europe. We've already got, and remember, this drug was only approved in, and at the end of January, and yet we already have 300 patients on treatment. You all know Europe.

Speaker Change: But I'm also really encouraged by the launch in Europe, We've already got and remember this drug was only approved in.

Speaker Change: And at the end of January and we already have 300 patients on treatment.

Speaker Change: No Europe, what we have to go country by country to get reimbursement and we have early access programs. Some of those we can charge revenue for some of them, we can't but we have already submitted reimbursement dossiers in five countries and the U S.

Christopher A. Viehbacher: We have to go country by country to get reimbursement. And we have early access programs. Some of those we can charge revenue for, and some of them we can't.

Christopher A. Viehbacher: But we have already submitted reimbursement dossiers in five countries in the US. So I think Europe will increasingly add to the revenue. It's probably more of a 2025 story than a 2024 story.

Speaker Change: I think Europe will will increasingly add to the revenue, it's probably more of a 2025 story than a 2024, but I think if I if I'm looking at the acceptance and the uptake then that launch is also off to a successful start and we know that there are any.

Christopher A. Viehbacher: But I think if I'm looking at acceptance and uptake, then that launch is also off to a successful start. And we know that there are an awful lot of patients in Latin America, and we've already submitted in Brazil, for example, and are submitting in Argentina. And I think that actually is going to be a major benefit and opportunity for us as well. Remember, there are no patients in Asia because this is a genetic disease that really affects people of European descent.

Speaker Change: A lot of patients in Latin America, and we've already submitted in Brazil. For example, submitting in Argentina, and I think that actually is going to be a major benefit and opportunity for us as well remember there are no patients in Asia because this is a.

Speaker Change: The genetic disease that really affects people of European descent.

Christopher A. Viehbacher: And in fact, it was quite interesting. I was talking to a key opinion leader in Germany who's actually done genetic studies, and you basically just follow where the explorers went. And that's where you're going to find the patients. So I think with that, you know, let's dive in a little bit deeper, and I'll turn it over to Alisha.

Speaker Change: It was quite interesting I was talking to a key opinion leader in Germany, who has actually done genetic studies and you basically just follow where the explorers went and thats, where youre going to find the.

Speaker Change: The patients so I think with that.

Speaker Change: Let's dive in a little bit deeper and I'll turn it over to Alicia.

Alisha Alaimo: Thank you Chris Good morning, everyone, that's able to join the call today, I'm Alisha Alaimo and as Chuck shared I lead our business in North America.

Alisha Alaimo: Thank you, Chris. Good morning to everyone that's able to join the call today. I'm Alisha Alaimo, and as Chuck shared, I lead our business in North America. This is a really unique period in Biogen's history with multiple first-in-class drug launches in the U.S., which gives us an opportunity to drive our return to growth. And for our team, it's also meaningful to support more people living with Alzheimer's, Friedrich's ataxia, and postpartum depression.

Alisha Alaimo: This is a really unique period and biogen's history with multiple first in class drug launches in the U S, which gives us an opportunity to drive a return to growth.

Alisha Alaimo: And for our team, it's also meaningful to support more people living with Alzheimer's Friedrichs ataxia and postpartum depression.

Alisha Alaimo: We thought it might be helpful to provide a perspective on the market dynamics of the launches and share how we're seeking a tailored approach to help provide patients with access to our therapies. Let me begin with the Alzheimer's market.

Alisha Alaimo: We thought it might be helpful to provide a perspective on the market dynamics of the launches and share how we're seeking a tailored approach to help provide patients with access to our therapies.

Alisha Alaimo: We begin with the Alzheimers market.

Alisha Alaimo: As Chris mentioned, we are seeing many major health systems across the country take a deliberate staged and phased approach, meaning they are setting up their pathways to get patients started with diagnosis, treatment, and monitoring. We believe we are now seeing a dynamic where some IDNs are turning the page, and they are focusing on expanding and extending their model. In Q1, we saw several IDNs across regions scale their patient volume. Among our priority 100 IDNs, units more than tripled in Q1 compared to Q4, which contributed to the overall estimated number of patients on therapy increasing approximately 2.5 times in Q1 versus Q4.

Alisha Alaimo: As Chris mentioned, we are seeing many major health systems across the country take a deliberate staged and phased approach, meaning they are setting up their pathways to get patients started with diagnosis treatment and monitoring.

Alisha Alaimo: We believe we are now seeing a dynamic where.

Alisha Alaimo: Some idea and are turning the page and they are focusing on expanding and extending their model in Q1, we saw several idms across regions scale their patient volume among our priority 100, ibms units more than tripled in quarter, one compared to quarter four.

Alisha Alaimo: Which contributed to the overall estimated patients on therapy, increasing approximately two five times in quarter one versus quarter four.

Alisha Alaimo: We believe this acceleration in new patients really began to emerge at the end of the quarter. For example, more than 20% of new patients since launch were added in March. Today, among our 100 priority IDNs, more than 80% have approved Lakembi through their P&T processes, and nearly 85% of those IDNs with approval have placed an order. Chris also mentioned that we're seeing more physicians gain experience with Lakembi. We saw the number of unique prescribers in Quarter 1 double compared to Quarter 4.

Alisha Alaimo: We believe this acceleration new patients really began to emerge at the end of the quarter for example, more than 20% of new patients since launch were added in March.

Alisha Alaimo: Today, among our 100 priority idea and more than 80% have approval it can be through their PMT process and nearly 85% of those eight <unk> with approval have placed an order. Chris also mentioned that we're seeing more physicians gain experience with the Kennedy we saw the number of unique prescribers in quarter one.

Alisha Alaimo: Double compared to quarter four.

Alisha Alaimo: We believe that we're still in the early phases of unlocking the potential to treat a high volume of patients at priority IDNs, and I thought it might be helpful to share some examples of these dynamics at the site level. There is one large health system in the Midwest that added Lakembi to its formulary in July of last year. But six months later, entering Q1, the system had ordered only 300 units.

Alisha Alaimo: We believe that we're still in the early phases of unlocking the potential to treat a high volume of patients at the priority Idms and I thought it might be helpful to share. Some examples of these dynamics at the site level.

Alisha Alaimo: There is one large health system in the Midwest that Adam look can be too its formulary in July of last year.

Alisha Alaimo: Six months later entering Q1. This system had ordered only 300 units. However by the end of March They had ordered 2700 units.

Alisha Alaimo: However, by the end of March, they had ordered 2,700 units. Similar to the example I just shared, there is also a health system in the Southeast that added Lekembe to its formulary in August of 23. Five months later, entering Q1, this system ordered about 560 units. By the end of Q1, this system ordered more than 1750 units to treat its patients. For context, a local neurologist network in that same region ordered 3,000 units during the same time period, perhaps because they've been able to scale their processes to treat more patients.

Alisha Alaimo: Similar to the example, I just shared there was also a health system in the southeast that added law can be towards formulary in August of 23 five months later entering Q1. This system order of about 560 units by the end of Q1. This system ordered more than 1750 units to.

Alisha Alaimo: Their patients for context, a local neurologists network in that same region ordered 3000 units through the same time period, perhaps because they've been able to scale their processes to treat more patients. However, we believe that's well known southeast ITN.

Alisha Alaimo: However, we believe this well-known Southeast IDN is planning to move beyond their flagship site of care to treat patients at multiple locations, which is another example of the expand and extend trend at the IDN. We believe many systems just now appear to be completing the staging phase, and we think the recent trends observed support our continued belief that Lakembi represents a significant commercial opportunity over the mid to longer term. With access and infrastructure progressing and patient volume accelerating, we believe this is also the right time to expand the field force. Biogen leaders are working to hire a customer-facing field team that will join ASI.

Alisha Alaimo: It is planning to move beyond their flagship site of care to treat at multiple locations, which is another example of the expand and extend trend at the idms.

Alisha Alaimo: We believe many systems just now appear to be completing the staging phase and we think the recent trends observed support our continued belief that like Kennedy represents a significant commercial opportunity over the mid to longer term.

Alisha Alaimo: With access and infrastructure progressing and patient volume accelerating we believe this is also the right time to expand the field force Biogen leaders are working to higher customer facing field team, which will join a site.

Alisha Alaimo: Simultaneously, to activate the patient community, Biogen and ASCI have launched new direct-to-patient and caregiver omni-channel marketing campaigns. These digital programs and point-of-care resources are focused on already diagnosed patients who we believe are under the care of a neurologist. With these promising signals emerging, we look forward to providing more updates in the future.

Alisha Alaimo: Simultaneously to activate the patient community Biogen and Ace I have launched new direct to patient and caregiver Omnichannel marketing campaigns. These digital programs and point of care resources are focused on the already diagnosed patients who we believe are under the care of a neurologist.

Alisha Alaimo: With these promising signals emerging we look forward to providing more updates in the future.

Alisha Alaimo: Now moving to Sky Claris.

Alisha Alaimo: We believe we're driving strong performance with the launch as we continue to exceed market penetration rates of most rare disease launch analogs. As of April 19th, we now have over 1,100 patients on therapy. With an estimated 4,500 addressable Friedreich's ataxia patients in the U.S., we have achieved 24% market penetration, which exceeds our own strong Spinraza launch. As is typical with rare disease launches, we believe we are now moving beyond the catch-up population to reach additional patients who have previously received a diagnosis of, or are suspected to have, Friedreich's ataxia.

Alisha Alaimo: We believe we're driving strong performance with the launches we continue to exceed market penetration rates of most rare disease launch analogs.

Alisha Alaimo: As of April 19th we now have over 1100 patients on therapy with an estimated 4500 addressable friedrichs ataxia patients in the U S. We have achieved 24% market penetration, which exceeds our own strong spin around the launch.

Alisha Alaimo: As is typical with the rare disease launches. We believe we are now moving beyond the ketchup population to reach additional patients who previously received a diagnosis of or are suspected to have friedrichs ataxia.

Alisha Alaimo: Though patient numbers may be uneven, we anticipate adding patients each month. Last quarter, we shared how we've integrated some of our sophisticated rare disease capabilities to drive improvements in access, logistics, and patient support. Notably, our market access team continues to make progress with securing favorable policies in quarter one.

Alisha Alaimo: Patient numbers may be uneven, we anticipate adding patients each month.

Alisha Alaimo: Last quarter, we shared how we have integrated some of our sophisticated rare disease capabilities to drive improvements in access logistics and patient support.

Alisha Alaimo: Notably our market access team continued to make progress with securing favorable policies in quarter one.

Alisha Alaimo: Today, nearly 80% of all U.S. pharmacy lives now have Skyclaris reimbursement. These patient support and access efforts are critical to help patients start therapy as soon as possible and remain on treatment for the long term. With a meaningful foundation of patients on therapy, we are focusing on two key areas in this next phase of our launch. First, educating community neurologists and PCPs about Friedrich's ataxia and Skyclaris, and second, engaging additional appropriate patients. I'll begin with our focus on HCPs. Remember, with Friedrich's ataxia, in addition to patients being concentrated at the top centers of excellence, we believe they are also being treated in the community.

Alisha Alaimo: Today, nearly 80% of all U S pharmacy lives now have sky Claris reimbursement.

Alisha Alaimo: These patient support and access efforts are critical to help patients start therapy as soon as possible and remain on treatment for the long term.

Alisha Alaimo: With a meaningful foundation of patients on therapy, we are focusing on two key areas. In this next phase of our launch.

Alisha Alaimo: First educating community neurologists and Pcp's about friedrichs, ataxia, and Sky Claris and second engaging additional appropriate patients I'll begin with our focus on hcp's.

Alisha Alaimo: Remember with Friedrichs ataxia. In addition to patients being concentrated the top centers of excellence. We believe they are also being treated in the community.

Alisha Alaimo: To support these physicians, we have expanded our field footprint, and we are using AI to analyze data to help reach the HCPs who may have untreated patients. With insights into the relevant sites of care and when patients last engage with their physicians, we believe we can help more patients even sooner. And with genetic testing, we anticipate patients can confirm a potential diagnosis and determine if Skyclaris is a treatment option. As far as our patient activation focus is concerned, we are encouraged by the real-world experiences that patients are sharing on social media, as, in our experience, these stories can help other diagnosed patients.

Alisha Alaimo: To support these physicians, we have expanded our field footprint and we are using AI to analyze data to help reach the hcp's, who may have untreated patients with insights into the relevant sites of care and when patients last engaged with their physician. We believe we can help more patients.

Alisha Alaimo: Even sooner.

Alisha Alaimo: And with genetic testing, we anticipate patients can confirm a potential diagnosis and determined as sky claris as a treatment option.

Alisha Alaimo: As far as our patient activation focus we are encouraged by real world experiences that patients are sharing and social media ads in our experience. These stories can help other diagnosed patients.

Alisha Alaimo: Many of these stories about the impact of Skyclaris include reports of the slowing of disease progression and, in some cases, even an improvement in their symptoms long-term. In addition to these organic stories, we anticipate launching our Skyclaris social media campaign soon.

Alisha Alaimo: Many of these stories about the impact of Sky Claris include reports of slowing of disease progression and in some cases, even an improvement in their symptoms long term. In addition to these organic stories, we anticipate launching our sky clearer social media campaign. Soon so we believe we're off to a strong start but we know there are more people living with friedrichs ataxia.

Alisha Alaimo: So we believe we're off to a strong start, but we know there are more people living with Friedrich's ataxia that we can help, and we look forward to supporting them. Which now brings me to Zerzouve. As Chris mentioned, we are encouraged by the performance of the launch today, and we think we are seeing several positive trends with providers, patient experience, and reimbursement. First, let me begin with providers.

Speaker Change: We can help.

Speaker Change: We look forward to supporting them.

Speaker Change: Which now brings me to <unk> as.

Speaker Change: As Chris mentioned, we are encouraged by the performance of the launch to date and we think we are seeing several positive trends with providers.

Speaker Change: <unk> experience and reimbursement.

Speaker Change: First let me began with providers across multiple physician types. We believe many providers are demonstrating an urgency to treat notably Ob Gyn led overall prescribing in quarter, one, which we believe is encouraging as they are often the first to see PPD patients. Furthermore, breadth of adoption has continued to grow in March near.

Alisha Alaimo: Across multiple physician types, we believe many providers are demonstrating an urgency to treat. Notably, OB-GYNs led overall prescribing in quarter one, which we believe is encouraging as they are often the first to see PPD patients. Furthermore, breadth of adoption has continued to grow. In March, nearly double the number of HCPs prescribed Zerzove compared to just January. We've seen that some early prescribers require only a few calls before they treat patients. However, keep in mind that Xerzavay is a scheduled product available through a specialty pharmacy.

Speaker Change: Double the number of Hcp's prescribed <unk> compared to just January we've seen that some early prescribers require only a few calls before they treat keep.

Speaker Change: Keep in mind that <unk> is a scheduled product available through our specialty pharmacy, while we believe psychiatrist are generally familiar with working with specialty pharmacy. This could be a new process for many ob guidance, we're working to educate these providers on the steps required so that they can support their appropriate patients.

Alisha Alaimo: While we believe psychiatrists are generally familiar with working with specialty pharmacies, this could be a new process for many OB-GYNs. We're working to educate these providers on the steps required so that they can support their appropriate patients. Second, some HCPs who have early experience with Zerzuviae have shared that some of their patients reported significant improvement in depressive symptoms within days of starting treatment. Several patients are sharing their personal 14-day treatment experiences on platforms like TikTok, and we believe their courage to tell their story will help educate other women living with postpartum depression.

Speaker Change: Second some hcp's have early experiences are zubaie have shared that some of their patients reported significant improvement in depressive symptoms within days of starting treatment.

Speaker Change: Several patients are sharing their personal a 14 day treatment experiences on platforms like Tech talk and we believe their courage to tell their story will help educate other women living with postpartum depression.

Alisha Alaimo: Third, we believe we're making good progress with government and commercial access. Many payers already have policies in place, the majority of which have been favorable, while some others continue to cover Zerzove, even without formal policies in place. Two of the three national pharmacy benefit managers are providing coverage for Zerzove without overly burdensome restrictions. We are in active discussions with the third national PBM as we await their decision. And while Medicaid tends to take longer, almost half of the states, including several of the largest, accelerated reviews into quarter one, which we believe is unusual for a process that can typically take up to a year after FDA approval. We are encouraged that approximately two-thirds of Medicaid beneficiaries with published policies appear to have minimal access restrictions.

Speaker Change: Third we believe we're making good progress with government and commercial access.

Speaker Change: Many payers already have policies in place the majority of which have been favorable while some others continue to cover reserves away even without formal policies in place two of the three national pharmacy benefit managers are providing coverage prisoners of a without overly burdening. Some restrictions we are in active discussions.

Speaker Change: With the third National Pbms, as we await their decision and while Medicaid tends to take longer almost half of the states, including several of the largest accelerated reviews in the quarter, one which we believe is unusual for a process that can typically take up to a year. After FDA approval. We are encouraged at them.

Approximately two thirds of Medicaid lives with published policies appear to have minimal access restrictions.

Alisha Alaimo: We anticipate the remaining states will review coverage throughout 2024, and we will continue to support their reviews as much as possible. Before handing it over to Mike, I want to underscore that we have an important responsibility to help people living with Alzheimer's, pre-dysplaxia, and postpartum depression, and we are working with urgency to help these patient communities. We believe we're making significant progress in that mission, and we look forward to continuing to share updates with you. With that said, I'd like now to pass it over to Mike.

Speaker Change: We anticipate the remaining states where coverage throughout 2024, and we will continue to support their abuse as much as possible before handing it over to Mike I want to underscore that we have an important responsibility to help people living with Alzheimer's Friedrich <unk> ataxia, and postpartum depression, and we are working with urgency to help these patient communities. We believe we are making.

Speaker Change: Significant progress and that mission and we look forward to continuing to share updates with you with that I'd like now to pass over to Mike.

Michael R. McDonnell: Thank you Alicia and Hello to everyone.

Michael R. McDonnell: Thank you, Alisha, and hello to everyone. I'd like to start with a high-level overview of our financial profile and how we are seeing this progress in the context of our Fit for Growth program. We maintain a sharp focus on improving profitability as we endeavor to return the company to not just EPS growth but revenue growth as well. Please note that any financial comparisons that I make are versus the first quarter of 2023.

Michael R. McDonnell: I'd like to start with a high level overview of our financial profile and how we are seeing this progress in the context of our fit for growth program.

Michael R. McDonnell: We maintain a sharp focus on improving profitability as we endeavor to return the company to not just EPS growth, but revenue growth as well.

Michael R. McDonnell: Please note that any financial comparisons that I make are versus the first quarter of 2023.

Michael R. McDonnell: Regarding our top line our four recent launches contributed revenue in the first quarter, which more than offset the 4% decline in our EMS business.

Michael R. McDonnell: And as we noted during our previous earnings call and at our recent webcast Investor Conference. We expect that this year's revenue will be skewed more towards the second half of the year and we expect this to be due to both the timing of shipments for <unk> outside the U S as well as the expected growth profiles for our recently launched products.

Michael R. McDonnell: Regarding our top line, our four recent launches contributed revenue in the first quarter, which more than offset the 4% decline in our MS business. And, as we noted during our previous earnings call and in a recent webcast investor conference, we expect that this year's revenue will be skewed more toward the second half of the year. We expect this to be due to both the timing of shipments for Spinraza outside the U.S. as well as the expected growth profiles for our recently launched product.

Michael R. McDonnell: On gross margin, we saw an improvement of five percentage points in the quarter as our revenue mix has shifted this is due to increasing high margin product revenue, replacing lower margin contract manufacturing revenue.

Michael R. McDonnell: We also had $45 million of idle capacity charges in the first quarter of 2023 and none in the first quarter of 2024.

Michael R. McDonnell: On gross margin, we saw an improvement of five percentage points in the quarter, as our revenue mix has shifted. This is due to increasing high-margin product revenue replacing lower margin contract manufacturing revenue. We also had $45 million of idle capacity charges in the first quarter of 2023 and none in the first quarter of 2024.

Michael R. McDonnell: Our R&D prioritization and fit for growth initiatives had a clear impact on our non-GAAP R&D and SG&A expenses.

Michael R. McDonnell: Which we referred to as core Opex.

Michael R. McDonnell: During the quarter.

Michael R. McDonnell: And that resulted in a 13% decrease year over year.

Michael R. McDonnell: These savings contributed to meaningful growth of our non-GAAP operating income of 24% year over year.

Michael R. McDonnell: Our R&D prioritization and fit for growth initiatives had a clear impact on our non-GAAP R&D and SG&A expenses, which we refer to as CORE-OPEX, during the quarter, and that resulted in a 13% decrease year over year. These savings contributed to meaningful growth of our non-GAAP operating income of 24% year-over-year. Operating margin was 31% in the quarter, as compared to 23% in the first quarter of 2023. And while these are encouraging improvements so far, we believe there is still more work that can be done to continue to improve these metrics.

Michael R. McDonnell: Operating margin was 31% in the quarter as.

Michael R. McDonnell: As compared to 23% in the first quarter of 2023.

Speaker Change: And while these are encouraging improvements so far we believe there is still more work that can be done to continue to improve these metrics.

Speaker Change: Now a bit more color on revenue dynamics during the first quarter.

Speaker Change: Total revenue was $2 3 billion.

Speaker Change: Which was a decrease of 7% at actual and constant currency.

Speaker Change: Our Ms franchise revenue declined approximately 4% driven by competition and the usual channels seasonality that we see in the first quarter.

Michael R. McDonnell: Now a bit more color on revenue dynamics during the first quarter. Total revenue was $2.3 billion, which was a decrease of 7% at both actual and constant currency. Our MS franchise revenue declined approximately 4% driven by competition and the usual channel seasonality that we see in the first quarter. However, within MS, femority revenue grew 18% and benefited from global patient growth as well as some favorable channel dynamics during the first quarter. Regarding Tecfidera in the EU, we have now seen most generics exit the market, which drove x US growth of 5% for Tecfidera this quarter. We continue to believe we are entitled to market protection in the EU until February of 2025.

Speaker Change: Within MFS, primarily revenue grew 18% and benefited from global patient growth as well as some favorable channel dynamics during the first quarter.

Speaker Change: Regarding <unk> in the EU, we have now seen most generics exit the market.

Speaker Change: Which drove X U S growth of 5% for <unk> this quarter.

Speaker Change: Continue to believe we are entitled to market protection in the EU until February of 2025.

Speaker Change: And now a quick double click on a rare disease revenue for the quarter.

Speaker Change: Sky Claris delivered $78 million of revenue, including approximately $5 million in Europe, where we have launches in several countries underway.

Speaker Change: Theres been raws it in the U S revenue was up 1% in the quarter and.

Michael R. McDonnell: And now a quick double click on our rare disease revenue for the quarter. SkyClaris delivered $78 million in revenue, including approximately $5 million in Europe, where we have launches in several countries underway. Chris Finraza in the U.S. Revenue was up 1% in the quarter, and we remain encouraged by the resilience here. Spinraza revenue outside the U.S. declined 35%. The majority of this year-over-year decline was due to shipment timing in certain emerging markets.

And we remain encouraged by the resilience here.

Speaker Change: It's been Rozzer revenue outside the U S declined 35%. The majority of this year over year decline was due to shipment timing in certain emerging markets.

Speaker Change: We continue to generally see stable patient numbers globally, and we would expect the shipping dynamic outside the U S to largely normalize throughout the remainder of 2024 we.

Michael R. McDonnell: We continue to generally see stable patient numbers globally, and we would expect the shipping dynamic outside the U.S. to largely normalize throughout the remainder of 2024. We also saw some modest negative impacts from competition and foreign exchange in the quarter. For the full year 2024, we expect global Spinraza revenue to decline by a low single-digit percentage.

Speaker Change: We also saw some modest negative impacts from competition and foreign exchange in the quarter.

Speaker Change: For the full year 2024, we expect global spin Rozzer revenue to decline by a low single digit percentage.

Speaker Change: So there is a very delivered $12 million of revenue, which we believe is inclusive of some channel stocking in anticipation of increasing demand, which is common for any new launch and.

Michael R. McDonnell: Xerzavay delivered $12 million in revenue, which we believe is inclusive of some channel stocking in anticipation of increasing demand, which is common for any new launch. And lastly, contract manufacturing revenue was notably lower year over year. And as we reflected in our guidance for the full year, we continue to expect contribution from this line to be significantly lower than last year due to completing a number of batch commitments in 2023. First quarter non-gap cost of sales was 22% of total revenue.

And lastly contract manufacturing revenue was notably lower year over year.

Speaker Change: And as we reflected in our guidance for the full year. We continue to expect contribution from this line to be significantly lower than last year due to completing a number of batch commitments in 2023.

Speaker Change: Okay.

Speaker Change: First quarter non-GAAP cost of sales was 22% of total revenue and that's an improvement of five percentage points.

Speaker Change: As I previously mentioned this improvement was driven by a more favorable product mix as revenue from new product launches replace lower margin contract manufacturing revenue.

Speaker Change: And it also.

It was related to having lower idle capacity charges, we did not have any in the first quarter of 2024.

Michael R. McDonnell: And that's an improvement of five percentage points. As I previously mentioned, this improvement was driven by a more favorable product mix as revenue from new product launches replaced lower margin contract manufacturing revenue, and it also was related to having lower idle capacity charges. We did not have any in the first quarter of 2024.

Speaker Change: First quarter non-GAAP R&D expense decreased $124 million, which was driven primarily by savings achieved from fit for growth, where we remain on track to achieve cost savings of $1 billion gross.

Speaker Change: And $8 million.

Speaker Change: Net of investment by the end of 2025, we also saw savings as a result of our R&D portfolio prioritization, which has had a meaningful impact as we discontinued some programs and have focused our spend on areas. We believe have a higher probability of success.

Michael R. McDonnell: First quarter non-GAAP R&D expense decreased $124 million, which was driven primarily by savings achieved from Fit for Growth, where we remain on track to achieve cost savings of $1 billion gross and $8 million net of investment by the end of 2025. We also saw savings as a result of our R&D portfolio prioritization, which has had a meaningful impact as we discontinued some programs that have focused our spend on areas we believe have a higher probability of success. Non-GAAP SG&A expense decreased approximately $33 million in the first quarter.

Speaker Change: non-GAAP SG&A expense decreased approximately $33 million in the first quarter.

Speaker Change: And this was primarily due to $50 million of G&A related cost reductions, which were realized in 2024 in connection with our fit for growth program.

Speaker Change: And that was offset by an increase in operational spending on sales and marketing activities in support of the <unk> Sky Claris launches I'll also note that the prior year included $31 million related to the termination of a co promote agreement for our EMS projects products in Japan.

Michael R. McDonnell: This was primarily due to 50 million in GNA-related cost reductions which were realized in 2024 in connection with our Fit for Growth program, but that was offset by an increase in operational spending on sales and marketing activities in support of the Lekembi and SkyClaris launches. I will also note that the prior year included $31 million related to the termination of a co-promote agreement for MS products in Japan. All of this together contributed to non-GAAP operating income growing 24%, with non-GAAP operating margin now above 30% and improving, and non-GAAP EPS growth of 8%.

Speaker Change: All of this to get together contributed to non-GAAP operating income growing 24%.

Speaker Change: With non-GAAP operating margin now above 30% and improving.

Speaker Change: non-GAAP EPS growth of 8%.

Speaker Change: Next a brief update on our balance sheet, we ended the quarter with approximately $6 $5 billion of debt.

Speaker Change: $1 $1 billion in cash and marketable securities and net debt of roughly $5 $5 billion.

Speaker Change: As of March 31, 2024 of the $6 5 billion of total debt included $250 million of the $1 billion 2023 term loan which was put in place at the time of the Reata acquisition.

Michael R. McDonnell: Next, a brief update on our balance sheet. We ended the quarter with approximately $6.5 billion of debt, $1.1 billion in cash and marketable securities, and a net debt of roughly $5.5 billion. As of March 31, 2024, the $6.5 billion of total debt included $250 million of the $1 billion 2023 term loan, which was put in place at the time of the RIATA acquisition. As of March 31st, 2024, we had repaid $750 million of this $1 billion facility.

Speaker Change: As of March 31, 2024, we had repaid repaid $750 million of this $1 billion facility. The remaining $250 million is expected to be repaid during the second quarter of this year. So this quarter.

Speaker Change: Earlier than our original expectation, which was by the end of this year.

Speaker Change: Note that this cash and marketable securities figure does not include a $437 million payment from Samsung, which we received earlier this month.

Speaker Change: We continued to generate strong free cash flow during the first quarter with approximately $507 million of free cash flow. So overall, our balance sheet remains in a strong position with increasing capacity to invest in growth initiatives.

Michael R. McDonnell: The remaining $250 million is expected to be repaid during the second quarter of this year, so this quarter, earlier than our original expectation, which was by the end of this year. I'd note that this cash and marketable securities figure does not include a $437 million payment from Samsung, which we received earlier this month. We continue to generate strong free cash flow during the first quarter with approximately $507 million of free cash flow.

Speaker Change: And regarding our strategic review of the Biosimilars business at this point, we have not received an acceptable offer from a third party.

Speaker Change: Our process remains ongoing and we will remain disciplined as we continue to explore all options, including retaining the business.

Speaker Change: Next I'd like to discuss our full year 2024 guidance ranges and assumptions, we are reaffirming our expectation of full year of 2024, non-GAAP diluted earnings per share of between $15 $16, which reflects expected growth of approximately five.

Michael R. McDonnell: So overall, our balance sheet remains in a strong position with increasing capacity to invest in growth initiatives. And regarding our strategic review of the biosimilars business, at this point, we have not received an acceptable offer from a third party.

Michael R. McDonnell: Our process remains ongoing, and we will remain disciplined as we continue to explore all options, including retaining the business. Next, I'd like to discuss our full year 2024 guidance ranges and assumptions. We are reaffirming our expectation of full-year 2024 non-GAAP diluted earnings per share of between $15 and $16, which reflects expected growth of approximately 5% at the midpoint of the range as compared to 2023. Additionally, all of the previous assumptions in our guidance, including those you see on this slide, remain unchanged.

Speaker Change: <unk> at the midpoint of the range as compared to 2023.

Speaker Change: All of the previous assumptions to our guidance, including those you see on this slide remain unchanged.

Speaker Change: I'd like to remind that we have potential R&D success.

Speaker Change: Milestone or opt in payments associated with the upcoming clinical data Readouts and we have made an allowance for some of these potential payments in our guidance of course, whether or not they are paid will be dependent on the data and a resulting decisions.

Speaker Change: And finally, we just announced the completion of a sale of one of our two priority review vouchers for $103 million.

Michael R. McDonnell: I'd like to remind you that we have potential R&D success, milestone, or opt-in payments associated with the upcoming clinical data readouts, and we have made an allowance for some of these potential payments in our guidance. Of course, whether or not they are paid will be dependent on the data and our resulting decision. And finally, we just announced the completion of a sale of one of our two priority review vouchers for $103 million.

Speaker Change: At this point, we expect to earmark these proceeds for business investment or to support business development opportunities as they arise.

Speaker Change: And in closing we remain committed to our number one goal of returning biogen to sustainable top and bottom line growth and creating long term value for our shareholders. We will now open up the call for questions.

Speaker Change: Thanks, Mike showed us where can we go to questions.

Michael R. McDonnell: At this point, we expect to earmark these proceeds for business investment or to support business development opportunities as they arise. And in closing, we remain committed to our number one goal of returning Biogen to sustainable top and bottom line growth and creating long-term value for our shareholders. We will now open up the call to questions.

Speaker Change: Thank you if you'd like to ask a question. Please press star one on your telephone keypad as a reminder, please limit yourself to one question. If you require any further follow up you May press star one again to rejoin the queue.

Speaker Change: Your first question comes from the line of Eric Smith with Cantor Fitzgerald.

Eric Smith: So hi, thanks, so much for all the updates and for taking my question I guess on <unk>, maybe for you or are we.

Mike: Thanks Mike. Jennifer, can we go to questions?

Jennifer: Thank you. If you'd like to ask a question, please press Star 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. Your first question comes from the line of Eric Schmidt with Cancer Fitzgerald.

Eric Smith: A couple of updates in the last month or so the EMEA delay on the CH MP recommendation and also.

Eric Smith: This is your partners doing but a.

Eric Smith: <unk> announced that they couldn't submit for the sub Q approval until they finish the Immunogenicity study I was hoping you could just update us on timelines for both of those initiatives going forward. Thank you.

Eric Schmidt: Yes, thanks, Eric. So maybe I can just start off by saying that, you know, we are working with Eastside to really provide patients with the optionality of a subcutaneous formulation. Our approach is entirely data-driven, so we were very encouraged to see the bioequivalence. We met last year, and we shared that at CTAD.

Speaker Change: Yes, thanks, Eric So maybe I can just start off by saying that.

Speaker Change: King with E side to really provide patients with the optionality of the subcutaneous formulation.

Speaker Change: Our approach is entirely data driven so we were very encouraged to see the bioequivalence, we met last year and we said that at feed that this was the most important milestone that after we've engaged with the FDA and currently just to characterize how we are approaching this we've split our strategy for subcutaneous formulation plus.

Unknown Executive: This was the most important milestone. Thereafter, we engaged with the FDA. And currently, just to characterize how we're approaching this, we've split our strategy for the subcutaneous formulation. First and foremost, we're working to submit a rolling submission for the subcutaneous autoinjector for maintenance. This we're going to do at the earliest. ESI has already submitted a fast track application. We're awaiting that, and as soon as we get it, we will make the submission while we continue to generate the data for the three-month immunogenicity that the FDA has required. Second, because our exposure with the subcutaneous formulation was higher than with the IV formulation, we believe it's in the interest of patients to optimize the dose, and that will lead to more convenience.

Speaker Change: Foremost, we are working to submit a rolling submission for subcutaneous auto injector for maintenance.

Speaker Change: We're going to do at earliest <unk> already submitted a fast track application, we're awaiting that and as soon as we get it we will make the submission while we continue to generate the data for the three month immunogenicity that the FDA has required.

Speaker Change: Second because our exposure with subcutaneous formulation was higher.

Speaker Change: And the IV formulation, we believe it's in the interest of patients to optimize dose and that will lead to more convenient so.

Unknown Executive: So we're optimizing this load, and that is something that is already ongoing and is currently ongoing this year. In terms of timelines, if we get the fast track for subcutaneous maintenance, we will file immediately for rolling review. And that we expect would be in this year, even if we don't get the fast track because we have completed the three month immunogenicity data by Q4. Second, for the subcutaneous induction therapy, we expect that we would file by the first quarter of 2026. That is what ESA has already communicated in their investor comments early March. I'd also like to remind you that we completed our intravenous maintenance filing by Q1 2024, as we had aimed. Thank you.

Speaker Change: So we are optimizing the stores and that is something that is already ongoing and is currently ongoing the field in terms of timeline, if we get the fast track for subcutaneous maintenance, we will file immediately for Rolling review and.

That we expect would be in this year, even if we don't get the fast track because there'll be have completed the three month immunogenicity data by Q4.

Speaker Change: For the subcutaneous induction therapy, we expect that we would file by the first quarter of 2026 that is what <unk> already communicated is that investor comments early March I'd also like to remind us that we completed our intravenous maintenance filing a bite you.

Speaker Change: One 2024, as we head out thank you.

Speaker Change: Thank you operator next question please.

Speaker Change: We'll go next to Paul.

Operator: Thank you, operator. Next question, please. All the next two, Paul, with Steeple.

<unk> with Stifel.

Paul: Hi, Good morning. Thank you for taking my question I was wondering if we could get your updated perspective on business development as it relates to capacity therapeutic area stage of development or commercial and just in the context of this how the kind of uncertain promising but uncertain trajectory of Mccann.

Paul Matteis: Good morning. Thank you for taking my question. I was wondering if we could get your updated perspective on business development as it relates to capacity.

Paul: Influences your appetite to execute on something now versus maybe wait a bit until 2025. Thank you.

Paul Matteis: We'll go next to Paul. Mitzah Swistiefle

Christopher A. Viehbacher: Thanks, Paul. You know, I think this year, we're going to be focused on business development to bring in some new assets, both into early stage research and development. You know, we have always called ourselves a neuroscience company, but the reality of neuroscience is that, you know, this is a high-risk area. You know, we don't always understand the underlying disease biology, that diseases progress slowly, that leads you to some very long and expensive trials; you can't often do a proof of concept study in phase two.

Speaker Change: Thanks, Paul.

Speaker Change: <unk>.

Speaker Change: I think this year, we're going to be focused on business development to bring in some new assets both into early stage research and <unk>.

Speaker Change: And development.

Speaker Change: <unk>.

We have always called ourselves a neuroscience company, but the.

Speaker Change: The reality of neuroscience is that.

Speaker Change: This is a high risk area.

Speaker Change: We don't always understand the underlying disease biology that diseases progress slowly that leads you to some very long and expensive trials you can often do a proof of concept study in phase two and so while we remain committed to neuroscience.

Christopher A. Viehbacher: And so while we remain committed to neuroscience, my personal view is that I think that is too, that is not diversified enough for a company of our size. And it's already last year's signal that we'd like to go into some adjacencies in rare diseases. I think we actually have a tremendous commercial capability in rare diseases; there are special commercial requirements, the need sometimes to support diagnosis, all of the hurdles with payers that have to be overcome, and, of course, finding the patients.

Speaker Change: My personal view is that I think that has to that is not diversified enough for a company of our size.

Speaker Change: It's already last year as signaled that we'd like to.

Speaker Change: Go into some adjacencies in rare disease, I think we actually have a tremendous commercial capability in rare disease or special <unk>.

Speaker Change: Commercial requirements, they need sometimes too.

Speaker Change: Support diagnosis.

Speaker Change: All of the hurdles with payers that have to be overcome and of course, finding the patients and there are an awful lot of tools that I think we have to.

Christopher A. Viehbacher: And there are an awful lot of tools that I think we have to be able to do that. And then immunology, you know; we've been an immunology company since the get-go since MS is really an autoimmune disease. So I think we'll use the opportunity with licensing collaborations to expand that. You know, I think where our balance sheet is. You know, something really extraordinary came along as we looked at it, but I don't think where we sit right now, we'd be thinking about doing anything this year on an acquisition front, not certainly of any size, but Mike, maybe you can talk to the people about, Does the balance sheet keep building? Yes,

Speaker Change: To be able to do that and then immunology.

Speaker Change: We've been in Immunology company since the get go since some <unk>.

Speaker Change: <unk> is really an autoimmune disease, so I think.

Speaker Change: We'll use the opportunity with licensing collaborations to expand that.

Speaker Change: I think where our balance sheet is.

Speaker Change: Yeah.

So it's something really extraordinary came along so as you look at it but I don't think where we sit right now we'd be thinking about doing anything this year on an acquisition front.

Speaker Change: Anthony size, but Mike maybe you can talk to.

Michael R. McDonnell: To the.

Michael R. McDonnell: The balance sheet capability.

Michael R. McDonnell: Yeah. So, Paul, I would just comment that our balance sheet is in a very good spot. If you look at our net debt position at the end of the first quarter, and then you pro forma that for the Samsung payment and the paydown that we'll make in the second quarter on the term loan, it's about $5 billion of net debt. And we generate about $3 billion of EBITDA. So it's only about somewhere between a turn and a half and two turns of leverage.

Michael R. McDonnell: Paul I would just comment that our balance sheet is in a very good spot if you look at our.

Michael R. McDonnell: Net debt position at the end of the first quarter and then you pro forma that for the Samsung payment.

Michael R. McDonnell: Pay down that will make in the second quarter on the term loan it's about $5 billion of net debt, we generate about $3 billion of EBITDA. So it's only about somewhere between a turn and a half and two turns of leverage. So we certainly could add another turn of leverage for something that we'd like to at least temporarily and we generate a couple billion.

Michael R. McDonnell: So we certainly could add another turn of leverage for something that we like, at least temporarily, and we generate a couple billion dollars of free cash flow per year. So I think about it in the context of 2024 as maybe a $4 to $5 billion of capacity number for things that we might be really interested in. And then if you were looking at something more RIATA-like, you know, that's probably a little more logical capacity-wise in 2025 or beyond.

Michael R. McDonnell: A free cash flow per year, or so I think about it in the context of 'twenty 'twenty four is maybe a $4 billion to $5 billion of capacity sort of number for things that we might be really interested in.

And then if you were looking at something more reata like that's probably a little more logical capacity wise in 2025 or beyond.

Mike: Thanks Mike and Chris. Can we take the next question, please? Yes, we'll go next to Salveen Richter with Goldman Sachs.

Thanks, Mike and Chris can we take the next question. Please.

Speaker Change: We'll go next to <unk> Richter with Goldman Sachs.

Salveen Jaswal Richter: Good morning, Thanks for taking my question for Sky Claris could you speak to the 'twenty 'twenty four outlook in any bolus dynamics that has impacted this and specifically you've talked about being at 24% U S market penetration how are you thinking about peak penetration in the U S and.

Salveen Jaswal Richter: Good morning. Thanks for taking my question. For Sky Claris, could you speak to the 2024 outlook and any bolus dynamics that are

Salveen Jaswal Richter: Yes, we'll go next to Salveen Richter with Goldman Sachs.

Frank Richter: And then the.

Frank Richter: The expectations for pace of uptake in Europe, and mix and net pricing that thank you.

Alisha Alaimo: Issue and take the U.S., and I can follow up with Europe.

Alisha Alaimo: Yeah, I think when you look at the U.S. and the market penetration, and you probably saw in the analogs on the slide, that the launch has gone very well thus far. And, as I also said, we've made it through the sort of catch-up population.

Speaker Change: You Shouldnt take give us and I can follow up with Europe, Yeah, I think when you look at the U S.

Speaker Change: And the market penetration and you probably saw on the analogs on the slide that the launch has gone very well thus far.

Speaker Change: And as I also said we've made it through sort of the catch up population. We have a lot of really good things in place right now that we are launching in parallel to identify.

Alisha Alaimo: We have a lot of really good things in place right now that we are launching in parallel to identify and hopefully get to the rest of the population. The way in which we think about this market, though, is that we do have two sets of patients. You have a set that is highly engaged with their physicians, and you have another set who haven't been engaged probably over the last two to five years.

Speaker Change: And hopefully get to the rest of the population the way in which we think about this market. Though is we do have two sets of patients you have assets that are highly engaged with their physicians and you have another set who havent been engaged probably over the last two to five years, we have enough data and analytics to understand.

Alisha Alaimo: We have enough data and analytics to understand exactly where these physicians are and how the patients have moved through them. With that, we are now identifying a lot of these offices, especially in the community, who could have a patient or two that might be diagnosed with general ataxia but not Friedrichs. What I referred to earlier in the call is expanding the field force footprint. We have a very targeted approach to these offices in order to, again, increase market penetration.

Speaker Change: And exactly where these physicians are and how the patients have moved through them and so with that we are now identifying a lot of these offices.

Especially in the community, who could have a patient or two that might be diagnosed with general taxes, but not friedrichs and so what I referred to earlier on the call is expanding the field force footprint and we have a very targeted approach to these offices in order to again increase the market penetration now as you see with something like a spin.

Alisha Alaimo: Now, as you see with something like Aspenraza, we've also performed very well and driven quite a good market penetration with that product, even though there are competitors in the marketplace. With Skyclaris, with no competitor really in the market, we expect to continue over the next several years to penetrate this for as far as we can go. We know that there are 4,500 patients that could have Friedrichs ataxia. What we're doing is planning everything that we can to get to as many of them as quickly as possible.

Speaker Change: We've also performed very well.

Speaker Change: And also have driven quite a good market penetration with that product, even though there is competitors in the marketplace with sky Claris with no competitor really in the market. We expect to continue over the next several years to penetrate this for as far as we can go we know that there are 4500 approximate patients that could have friedrichs ataxia and so what we're doing is planning.

Speaker Change: That we can to get to as many of them as quickly as possible.

Speaker Change: Thanks Alicia.

Speaker Change: And on Europe.

Speaker Change: In some ways the single payer system sexy.

Speaker Change: Our.

Speaker Change: Really ideal for rare diseases.

Speaker Change: A lot of patients in the U S. Even if you have reimbursement even if you have insurance coverage fair enough a lot of hurdles at the U S health care system.

Christopher A. Viehbacher: Thanks, Alisha. Yeah, and in Europe, you know, in some ways, the single-payer systems actually are really ideal for rare diseases. You know, a lot of patients in the U.S., even if you have reimbursement, even if you have insurance coverage, there are an awful lot of hurdles that the U.S. healthcare system imposes upon patients, and a lot of those we don't really see in Europe, and so I think we're seeing rapid uptake. And then the ex-US and Latin America, that could well be a story for 2025. I think you may see our first launch in Brazil in the early part of 2025.

Speaker Change: Impose upon patients and a lot of those we don't really see in Europe, and so I think we're seeing.

Speaker Change: A rapid uptake again theirs.

Speaker Change: There is a catch up population.

Speaker Change: And there is a difference between patients.

Patients on treatment and revenue generating patients. So first we have.

Speaker Change: We are actually the commercial launch in Germany, because we can get reimbursement relatively quickly.

Speaker Change: There are countries will come online as we go through the individual country reimbursement processes, but our objective is actually buildup to patients. So theres a number who are on free drug at the moment through these EAP. Some of the piece you can charge for.

Speaker Change: It's going to be a little lumpy.

Speaker Change: We look at the revenue line, but.

Speaker Change: We're extremely encouraged by the <unk>.

Speaker Change: By the uptake of patients and then ex U S and Latin America.

Speaker Change: Could well be a story for 2025, I think you may see.

Speaker Change: Our first launch in Brazil in the early part of 2025.

Speaker Change: Great. Thanks, Chris can we move to the next question. Please.

Christopher A. Viehbacher: Great, thanks Chris. Can we move to the next question please? Yes, we'll go next to Umer Raffat with Evercore. Hi guys, thanks for taking my question. I have one for Priya, if I may. I know there's the late stage lupus readout with the CD40 ligand antibody this summer. But I also realize that

Speaker Change: Yes, we'll go next to <unk> with Evercore.

Evercore: Hi, guys. Thanks for taking my question I have one for you if I may I know, there's the late stages of lupus readout with the CD 40 ligand antibody this summer.

Evercore: I also realize the time point on this readout is week 48, instead of a week 24, and I guess my question is knowing that there wasn't a clear dose response on efficacy in the prior trial could you speak to how the B cell impact was different between doses and whether the prolonged duration could actually help the b cell impact on this upcoming readout. Thank you.

Umer Raffat: Yes, we'll go next to Umer Raffat with Evercore.

Priya Singhal: Thanks, Umer. You know, we have looked at the Phase 2 study very carefully, and we have decided to include the 48-week endpoint of BCCLA for this Phase 3 study. And ultimately, we're looking for a meaningful change on the primary endpoint and the key secondary endpoints for SLE, such as severe flare prevention and patients achieving low disease activity. We also think that the BCCLA is a sensitive, clinically meaningful composite measure of SLE disease activity that requires disease improvement across all body systems with moderate or severe baseline activity without worsening and the need for escalation in background medication.

Speaker Change: Thanks Omar.

Speaker Change: Have looked at the phase two study very carefully and we have decided and we included the 48 48 week end point on <unk> for this phase III study.

Speaker Change: And ultimately we're looking for a meaningful change on the primary endpoint and the key secondary endpoints, most smbs such as severe flare prevention in patients achieving low disease activity.

Speaker Change: We also think that the big guys are sensitive clinically meaningful composite measure of SLE disease activity and requires disease improvement across all body systems with moderate or severe baseline activity without worsening and the need for escalation and background medications. So we modified the trial we are refinery have differ.

Priya Singhal: So we modified the trial. We have refined the population, and we think that this is going to be really important as we kind of, you know, look forward to the readout. The other piece I think here to keep in mind is that we considered how we could modify the population for this study and get to an answer really quickly to bring DAPI to patients. So I hope that that answers your question.

The population and we think that this is going to be really important as we kind of.

Speaker Change: Looking forward to the readout.

Speaker Change: The other piece I think here to keep in mind is that we considered how we can modify the population for this study and get to an answer really quickly to bring potentially daphne to patients.

Speaker Change: Did that answers your question.

Priya Singhal: Thanks, Priya. Let's go to the next question, please.

Speaker Change: Let's go to the next question please.

Michael J. Yee: We'll go next to Michael Yee with Jeffreys.

Speaker Change: We'll go next to Michael Yee with Jefferies.

Michael J. Yee: Hey, guys. Thanks.

Michael J. Yee: Hey guys, thanks. Um, I wanted to revisit the Sky Clarus comments. I know you said you were planning to add patients month to month, but can you just talk about the trajectory of Sky Clarus this year, as it relates to any offsets like discontinuation rates, etc, etc. How does that factor into it? And also, will you book German revenues this year? So just talk about the dynamics of revenues for Sky Clarus. And if I may sneak in one clarification, Priya said the sub-Q induction filing for what could be Q126. I just want to clarify that that's what she said. Thank you. Yes,

Michael J. Yee: Wanted to revisit the Sky Claris comments I know you said you were planning to add patients month to month can you just talk about the trajectory of Sky Claris. This year as it relates to also any offsets like discontinuation rates et cetera, et cetera, how does that factor into it and also will be booked Germany revenues.

Michael J. Yee: This year. So just talk about the dynamics of revenues for Sky class and if I may sneak in one clarification Perea said sub Q induction filing for what can be Q1 'twenty six.

Speaker Change: That's what that's what she said thank you so much.

Speaker Change: Yes.

Priya Singhal: Yes, the outcome and the filing will be in that period, but we'll communicate more on this once we optimize the dose and we go forward.

Speaker Change: The outcome and the filing will be in that period, but we'll communicate more on this once we optimize the doors and we go forward.

Speaker Change: Okay, I'm sorry, Chris.

Alisha Alaimo: Yep, so for SkyClaris, you know, it is quite complicated month to month, I would say, because you have patients, obviously, that we're getting via the initial forms, which I will say for the highly engaged population, we are pretty much maxing that out now. We absolutely know who they are, and we've captured them through the physicians. But then you're also going to have a discontinuation rate, as you have noted, and you're going to have patients that are being, you know, pulled off of the initial forms and put onto the product. And then, of course, you may have them miss a dose or two, right? So then there's compliance.

Christopher A. Viehbacher: Yeah, so for Sky Clarus.

Speaker Change: It is quite complicated month to month I will say because you have patients obviously that we're getting via the start forms which I would say for the highly engaged population we are pretty much maxing that out now we absolutely know who they are and lease capture them to the physicians, but then you're also going to have a discontinuation rate as you have now.

Speaker Change: And youre going to have patients that are being pulled off the start forms putting onto product and then of course, you may have them Miss a dose or two right. So then there's compliance.

Alisha Alaimo: So month to month, it will be lumpy because you can say you add 50 patients, but then you have other dynamics going on in the patient population. But what our outlook is for the year, which I can't give you a specific number, is that we are going to continue to add patients every single month if we are able to find those patients in the community. And there are other puts and takes in those numbers, but at the end of the day, we will ensure that we are still, you know, leading the rare disease analogs, and that we're going to generate market penetration.

Speaker Change: Month to month that will be lumpy.

Speaker Change: Because you can say you add 50 patients, but then you have other dynamics going on in the patient population, but what are what our outlook is for.

Speaker Change: For the year, which I can't give you a specific number is that we are going to continue to add every single month, we are able to find those patients and the community and there are other puts and takes in those numbers, but at the end of the day, we will ensure that we are still leading the rare disease analogs and that we're going to generate market penetration.

Christopher A. Viehbacher: Yeah, and in Europe, we're booking revenue now for Germany. And actually, we've launched in Austria and the Czech Republic as well. And some countries were actually able to charge for the early access programs in Europe. And some of that revenue will come down to, but you probably will see more full EU revenue as a region in 2025. But there will certainly be revenue contributions in 2024 from certain countries in Europe.

Speaker Change: Yes, and in Europe, we're booking revenue now for Germany and actually.

Speaker Change: We've actually launched in Austria, and the Czech Republic as well.

Speaker Change: Some countries, we're actually able to.

Speaker Change: Charge for the early access programs in Europe, and some of that revenue will come down too, but you'll probably see more full EU as a region revenue in mid 2025, but there will be certainly revenue contribution in 2024 from certain countries in Europe.

Christopher A. Viehbacher: Thanks, Chris. Let's go to the next question, please. Call the next two, Colin Bristow with UBS. Good morning, and thanks for taking the questions. Maybe one on the Lakembi commercial setup. So one investor concern and important feedback we've been hearing from positions is around there being less sales.

Speaker Change: Thanks, Chris Let's go to the next question. Please.

We'll go next to Colin Bristow with UBS.

Colin Nigel Bristow: Good morning, and thanks for taking the question maybe one on the left can be commercial setup.

Colin Nigel Bristow: So one investor concern important feedback we've been hearing from physicians is around that being less sales and marketing presence than perhaps had been expected.

Colin Nigel Bristow: Next is Colin Bristow with UBS.

Alisha Alaimo: Thank you very much for the question. Um, you know, if you really take a step back and look at how we strategically looked at this launch, we always said that we were going to do it in a stepwise approach. We knew from the beginning that sites were going to take a while to get up and running; we had to wait for several indicators from CMS giving full approval and NCD, you know, being overturned for PET.

Colin Nigel Bristow: In your prepared remarks, Youre, saying, you expect a 30% increase in the U S footprint.

Colin Nigel Bristow: You're able to sort of quantify the current U S commercial footprint.

Colin Nigel Bristow: This 30% increase always planned or was it based on some reviews.

Speaker Change: Welcome adequate thank you.

Speaker Change: Thank you very much for the question.

Speaker Change: If you really take a step back and look at how we strategically looked at this launch we always said that we're going to do in a stepwise approach. We knew from the beginning that sites are going to take a while to get up and running we had to wait for several indicators from CMS, giving full approval and NCD being overturned for Pat and.

Alisha Alaimo: And so with that being said, we didn't want to go out of the gate, you know, with a really huge field force that wasn't able to actually impact or penetrate the market. So instead, what was decided was we went in with a very focused approach. We focused on really the top accounts that we think handle the majority of the diagnosed patients, especially those under neurology care. And we said once the market gets to a place where we think it's ready for expansion, then we will expand.

Speaker Change: So with that being said, we didn't want to go out of the gate you know with that really huge field force that wasn't able to actually.

Speaker Change: Impact or penetrate the market. So instead, what was decided as we went in with a very focused approach we focused on really the top accounts that we think handle the majority of the diagnosed patients, especially that are under neurology cure and we said once the market gets to a place where we think it's ready for expansion then we will explore.

Speaker Change: And now to your comment about physicians coming back, saying, they're not seeing a lot of sales efforts I think we also have to have.

Alisha Alaimo: Now, to your comment about physicians coming back saying they're not seeing a lot of sales efforts, I think we also have to have, really, the context of getting these sites up and running takes a lot of effort. And you also don't want to have, you know, three, four, five different people going into these accounts to support them.

Speaker Change: Really the context of getting these sites up and running takes a lot of effort and you also don't want to have 345 different people going into these accounts to support and so we've been very focused on really getting the large <unk> up and running some of these centers that have come forward that really can move quite quickly we got them up and.

Alisha Alaimo: And so we've been very focused on really getting the large IDNs up and running. Some of these centers that have come forward that really, you know, could move quite quickly, we got them up and running. And now as you see the expansion take place, With the 30%, we're going to focus mainly on the large IDNs that are now opening up their expand and extend satellite offices, where they're now going to allow a larger cohort of patients to come through for diagnosis and treatment.

Speaker Change: Running and now as you see the expansion take place.

Speaker Change: With the 30% we are going to focus mainly on the large idms that are now opening up their expand and extend satellite offices, where they are now going to allow a larger cohort of patients to come through for diagnosis and treatment and so with this next phase.

Alisha Alaimo: And so with this next phase of the build, which we believe we've done a lot of analysis behind, and we've had a lot of third parties weigh in on what is the appropriate sizing, we in ASI believe that this is going to be the right footprint to drive the next acceleration of growth.

Speaker Change: Of a build which we believe we've done a lot of analytics behind it.

Speaker Change: And we've had a lot of third parties weigh in on what is the appropriate sizing. We in ASI believe that this is going to be the right footprint to drive the next acceleration of growth.

Premier: So let me just turn it to premier for clarification, Mike <unk> question on Thank you. Thank you just wanted to clarify that it's the outcome by fiscal year.

Priya Singhal: And let me just turn it to Priya for a clarification on Mike Yee's question about... Thank you.

Priya Singhal: Thank you. Thank you.

Priya Singhal: Just wanted to clarify that this is the outcome by fiscal year, you know, ECI's fiscal year 25, which is Q1 2026, for subcutaneous induction. Of course, that could be a range because, you know, it would involve SPLA, a prior, potentially a priority review and other such aspects, which could shift it. But that is the outcome ECI has communicated. I just wanted to reaffirm that.

Premier: No.

Michael R. McDonnell: Besides fiscal year 25, which is Q1 2026 for the subcutaneous index induction of course that it could be a range because it would involve.

Michael R. McDonnell: S BLA, a priori potentially a priority review and other such aspects exports shifting but that is the that is what <unk> communicated I just wanted to view that.

Operator: Thank you for the outcome and not the filing. Yes, obviously earlier earlier. Yes. Thank you. Thanks Priya. Let's move to the next question, please

Michael R. McDonnell: The outcome not the filing yes, obviously earlier earlier, yes, okay. Thanks.

Speaker Change: Thanks for you, let's move to the next question. Please.

Brian Abrahams: Brian Abrahams, RBC Capital Markets

Speaker Change: Go next to Brian Abrams with RBC capital markets.

Brian Abrahams: Hi there. Good morning. Thanks so much for taking my question. With regard to Lekembi sub-q, on the FDA request for immunogenicity data, I'm curious if you have a sense as to what drove that request, your level of confidence that the PK will be linear using half the sub-q dose, and then when are you proposing that patients in their course of treatment should transition from an IV to a sub-q maintenance dose? Thanks

Brian Abrahams: Hi, there good morning. Thanks, so much for taking my question with regards to can be a sub Q on the FDA request for Immunogenicity data.

I'm curious if you have a sense as to what drove that request your level of confidence that the PK will be linear using half the sub Q dose and then what are you proposing that patients in their course of treatment should transition from an IV to subcutaneous. Thanks.

Speaker Change: Sure. Thanks, Bryan so overall the.

Priya Singhal: Thanks, Brian. So overall, we, you know, as you know, we tested 720 milligrams in the naive patient population that was in the Clarity AD Open Label Extension sub-study for subcutaneous. Now, from that, in addition to that, we had modeling data, and this is what we are proposing for 360 milligrams to be the weekly maintenance dose, and the FDA is just requiring additional immunogenicity data. We see this as a reasonable request, and we are already in the process of generating it.

Speaker Change: As you know we had tested the 720 milligrams.

Speaker Change: The naive patient population that goes in the clarity in the open label extension study for subcutaneous now from that in addition to that we had modeling data and this is what we are proposing for 360 milligrams to be but we pay maintenance and the FDA is just requiring additional.

Speaker Change: Immunogenicity data, we see this as a reasonable request and we are already in the process of generating it. So overall, we don't expect that the bio equivalents is going to be <unk> question. This is now generally about the immunogenicity.

Priya Singhal: So overall, we don't expect that the bioequivalence is going to be in question. This is now really about the immunogenicity and actually generating tumors on patients who would be tested for this. So that's what we expect with that. Can you remind me what the second aspect of your question was?

Speaker Change: J&J iterating on patients who would be destined for us. So that's what we expect with that can you remind me what was the second aspect of your question.

Brian Abrahams: When are you proposing that patients transition from the IV to the sub-Q maintenance? Is there data supporting when in the course of treatment that transition should happen?

Speaker Change: When are you proposed language that patients transition from the IV to the sub Q maintenance as their data supporting.

Speaker Change: When in the course of treatment that transition should happen.

Priya Singhal: Yes, and I think that's important because we have filed for an intravenous maintenance dose as we've already completed this filing Q1-24 and really that has come from three lines of evidence. The study 201, which was the phase 2 study, the gap period, modeling, as well as open label extension in phase 3.

Speaker Change: Yes, and I think that's important because we have filed for an intravenous maintain its Mike being already completed this filing Q1, 'twenty four and really that has come from three lines of evidence. The study 201, which was the phase two study the gap <unk> modeling as well as the open label.

Speaker Change: Tension in the phase III, so that's what's informed our maintenance IV filing.

Priya Singhal: So that's what informed our maintenance IB filing, and really, it will be decided along with the FDA on what is the appropriate time for transition from IV, you know, bi-weekly to weekly, now up to four-weekly. And in addition, following that, we'll have the subcutaneous maintenance discussion. So really, it's very systematic, and we need to first get through all the IV maintenance, and in parallel, we have the SC maintenance. I hope that makes sense.

Speaker Change: And really it will be decided along with the FDA on what is the appropriate time for transition from IV.

Speaker Change: Biweekly to routine.

Speaker Change: Now of deformity and in addition, following that we'll have the subcutaneous maintenance discussion. So really it's very systematic and we need to first get through all of the IV maintenance, adding fat and they'll be happy to see me to that I hope that makes sense.

Priya Singhal: Thanks Priya. Let's move to the next question, please. Up next is Jay Olson with Oppenheimer. Oh, hey, thanks for providing this update. It seems like compared to previous quarters, you're focusing

Okay.

Speaker Change: Let's move to the next question please.

Speaker Change: We'll go next to Jay Olson with Oppenheimer.

Jay Olson: Oh, hey, thanks for providing this update it seems like compared to previous quarters, you're focusing more on your three commercial launches and relatively less on the R&D pipeline is there any particular reason for that shift in focus and how much more work do you plan to do.

Jay Olson: Jay Olsen with Oppenheimer

Christopher A. Viehbacher: Oh, I'll start. I mean, I think we have the first four data readouts coming in mid year. So I think, you know, we felt we'd have more data when it made sense to bring back the R&D when we've got more data. I would say, actually, from a prioritization point of view, and Priya, you can weigh in here, but I think we've largely done the job of having projects that are either projects of conviction or projects where we're waiting for the data outcome, you know, they're, they

Optimize your R&D portfolio. Thank you.

Speaker Change: Well I'll start I mean, I think we have first four data readouts coming in midyear. So I think.

Speaker Change: We felt we'd have more data when we make sense to bring back the R&D when we've got more data.

Speaker Change: I would say actually from a prioritization point of view and prayer you can weigh in here, but I think we've we've largely done the job of of.

Speaker Change: Having projects that are either projects have conviction or projects, where we are waiting the data outcome. There are they are in flight.

Christopher A. Viehbacher: And, you know, given the nature of neuroscience projects, you know, we wait, we need to wait and see what the data say, I think you're going to find us much more disciplined about whether we progress or not; our go, no go decisions, I think, have all been clearly defined. For those who are interested,

Speaker Change: And just given the nature of of neuroscience projects.

Speaker Change: We need to wait and see what the data say I think youre going to find us much more disciplined about whether we progress or not our go no go decisions I think have all been clearly defined for those.

Christopher A. Viehbacher: I think the next job is really now to build out the pipeline, as I talked about earlier, that we want to diversify our business a little bit more than we have in the past. So, you know, Priya is certainly working, along with Jane, on thinking about what things we can additionally bring into the pipeline from outside. Priya, I don't know whether you want to add anything there.

Speaker Change: I think the next job is really now to build out the pipeline as I talked about earlier that we wanted to diversify our business a little bit more than we have in the past.

Speaker Change: So pre is certainly working along with Jane on thinking about what things. We can additionally, bring into the pipeline from outside but pretty I don't know whether you want to add anything there. Thanks, Chris I think you've covered it that's exactly right. We are very excited about our four readouts. We are preparing for them we have already.

Priya Singhal: Thanks, Chris. I think you covered it. That's exactly right.

Priya Singhal: We are very excited about our four readouts, and we are preparing for them. We have already worked through go-no-go criteria, and we continue to remain very excited about the rest of the pipeline that's in mid- and late-stage, particularly our anti-TAU ASO, DEBADE, as well as our two phase-three programs in SLE, Little Philomab, as well as DAPI that we just talked about, and with Little Philomab also in cutaneous lupus. So we have a number of projects in early phase development, and we're trying to be very disciplined about making sure that we make evidence- and database decisions.

Speaker Change: Book to go no go criteria and we continue to remain very excited about the rest of the pipeline that's in mid and late stage, particularly.

Speaker Change: Anti Tau ASO debate as well as our two phase III programs in SLE, a leader for the <unk> as well as Daphne that we just talked about and with <unk> also in cutaneous lupus. So we have a number of projects in early phase development and we're trying to be very disciplined about making sure that we.

Speaker Change: Make evidence in Databased decision.

Operator: Thanks, Priya. Next question, please.

Speaker Change: Thanks, Brett.

Speaker Change: Question. Please.

Chris Raymond: We'll go next to Chris Raymond with Piper Sandler.

Speaker Change: We'll go next to Chris Raymond with Piper Sandler.

Chris Raymond: Oh, Thanks, just maybe a strategic question.

Chris Raymond: Oh, thanks. Just maybe a strategic question on your BizDev strategy. So Chris...

Chris Raymond: Your Biz Dev strategy so Chris.

Christopher A. Viehbacher: I heard your comments around diversifying away from neurology. You guys have been saying that for a while, and, you know, your deals have focused on areas other than MS. But, um, there is actually, if you look across the industry, some decent early innovation in MS, and, you know, even with your business on the decline, our checks still indicate that Biogen remains, you know, a trusted company, and, um, there's an awful lot of value, I would argue, in that market presence.

Chris Raymond: I heard your comments around diversifying away from neurology, you guys have been saying that for a while.

Chris Raymond: Your deals are focused on the areas other than MF.

Chris Raymond: Right.

Chris Raymond: There is actually if you look across the industry some decent early innovation in them.

Chris Raymond:

Chris Raymond: Even with your business on the decline our Archrock still indicated Biogen remains a.

Chris Raymond: Trusted company and Theres.

Chris Raymond: There is an awful lot of evaluate I would argue with that market presence.

Christopher A. Viehbacher: I guess maybe just the question here, strategically: your activities in business development are that due to your view of the need to diversify away from MS strategically? Or is it a view that you just haven't seen an early asset worth licensing? Or is there some other underlying dynamic of the MS market that has led you guys to prioritize other areas?

Chris Raymond: I guess, maybe just a question here strategically is as your.

Chris Raymond: Activities and business development.

Chris Raymond: Is that due to your you have a need to diversify away from them as strategically.

Chris Raymond: Or is it a view that you just haven't seen an early asset worth licensing or is there. Some other underlying dynamic of the EMS market that have led you guys to prioritize other areas. Thanks.

Christopher A. Viehbacher: Well, there's a little bit of a lot of the above in there. I think the first is, you know, we haven't abandoned MS. We do have programs in early research. You know, the unmet need in MS has really narrowed. It's really the progressive form, which is a very tough indication really to go after.

Chris Raymond: Well, there's a little bit of a lot of the above in there.

Chris Raymond: I think the first as you know.

Chris Raymond: We havent abandoned EMS, we do have programs in research early.

Chris Raymond: The unmet need in MFS has really narrowed its really the progressive form.

Chris Raymond: Which is a very tough.

Chris Raymond: <unk> really to go after.

Christopher A. Viehbacher: But you know, we have programs still in ALS. And, in fact, I think the fact that CALSADI was approved has actually proven to be an enormous scientific achievement. It may, it may not be a major financial achievement.

Chris Raymond: But we have programs still in AOS and in fact, I think the fact that that called Saudi was approved is actually proven to be a an enormous scientific achievement. It may it may not be a major financial achievement, but this really opens up.

Christopher A. Viehbacher: But, you know, this really opens up the field to having a biomarker where you can tell whether something is working or not in ALS. And so we have we have a number of programs for ALS. We're in Huntington's, we have a program in Parkinson's, as you know, we've got tau, which I think, between tau and lupus, we see as programs of high conviction within within the company. So we feel that, you know, I think you're right. We are very well placed in neurology. I wouldn't just say MS, but neurology.

Chris Raymond: The field, having a biomarker where you can tell whether something is working or not in AOS and so.

Chris Raymond: So we have a number of programs in the U S where in Huntington's, we have a program in Parkinson's as you know.

Chris Raymond: We've got.

Chris Raymond: Al which I think between Tau in lupus, we see as programs of high conviction within within the company. So we feel that.

Speaker Change: I think you are right. We are very well placed neurology I wouldn't just say EMS, but put neurology.

Christopher A. Viehbacher: But the reality is that, you know, we sit there with programs that are very difficult to predict, very expensive, and very long-term. And when you actually look at the ability to do external deals, that field is also very narrow. There's just not that many people working in the CNS space.

Speaker Change: But the reality is is that.

Speaker Change: We sit there with programs that are very difficult to predict very expensive very long running.

Speaker Change: And when you actually look at the ability to do external deals that that field is also very narrow theres just not that many people working in the CNS space. So we're by no means abandoning it and in fact.

Christopher A. Viehbacher: So we're by no means abandoning it. And in fact, you know, the fact that we go after these really tough diseases is really a source of pride within Biogen. And I have to say, I continue to be amazed at the capability and talent we have within the organization. But the reality is, we need to have more predictable results out of R&D. And I think we do have a lot of that capability within the company.

Speaker Change: The fact that we go after these really tough diseases is really a source of pride within Biogen and I have to say I continue to be amazed at the capability and talent, we have within the organization, but the reality is we need to have more predictable results.

Speaker Change: Out of R&D and I think we do have a lot of that capability within the company you know I don't see us ever moving going left turn into oncology or something like that but I do think we have the legitimacy and being in rare diseases and an expanding into immunology and in fact, you know I think that what we've been doing in EMS.

Christopher A. Viehbacher: You know, I don't see us ever, you know, moving, going left turn into oncology or something like that. But I do think we have legitimacy in being in rare diseases and expanding into immunology. And in fact, you know, I think that what we've been doing in MS and, in fact, lupus is really an indicator of that. So I think we're going to continue to branch out. But it also broadens our opportunity set for collaboration and not just diversifies our portfolio.

Speaker Change: And in fact lupus is is really an indicator of that so I think we're going to continue.

Speaker Change: To branch out, but it also branches out our opportunity set for collaboration.

Speaker Change: And not just diversifying our portfolio.

Christopher A. Viehbacher: Thanks, Chris. And can we take our last question, please, operator? This will go next to Terence Flynn with Morgan. Great. Thanks for taking the question. Maybe a two part question on what I was just wondering. Obviously, you talked about the number of unique prescribers.

Speaker Change: Sure. Thanks, Chris can we take our last question. Please operator.

Speaker Change: Yes, we'll go next to Terence Flynn with Morgan Stanley.

Terence Flynn: Great. Thanks for taking the question maybe a two part on what can be just wondering.

Terence Flynn: You talked about the number of unique prescribers more than doubling this quarter, just wondering how much more breadth you're expecting from the field force expansion here as we think about the forward through 'twenty four and then any early insights on duration of treatment that youre seeing so far thank you.

Terence Flynn: Yes, we'll go next to Terence Flynn with Morgan Zandling.

Alisha Alaimo: Yeah, so thank you for the question. Um, my outlook for the rest of the year is when you really think about the phases that these IDNs are in, and even when you see these small accounts, they do move fast, right, out in the community. And if you really take a step back and look in context for the IDNs, we got an approval, full approval in July. It took about six to, you know, eight months for these very large systems to get organized, which is that staged and phased approach I talked about.

Speaker Change: Yes. So thank you for the question.

Speaker Change: You know.

Speaker Change: My outlook for the rest of the year is when you really think about the phases that that these <unk> and then even you see these small accounts they do move fast right out in the community.

And if you really take a step back and look in context for the IV and we got an approval full approval in July it took about six to eight months for these.

Speaker Change: These very large systems to get organized which is that staged and phased approach I talked about and the fact that now they're actually opening up these other sites for diagnosing and prescribing.

Alisha Alaimo: And the fact that now they're actually opening up these other sites for diagnosing and prescribing, I believe that you're going to also see the number of physicians prescribing increase, and it will continue to decrease throughout the rest of the year. If you look at how many physicians that we are targeting and the numbers that are actually prescribing, we still have a good delta there. And so I do see that continuing. Thank you all for joining us today.

Speaker Change: I believe that you are going to also see the number of physicians prescribing increasing and it will continue to decrease throughout the rest of the year. If you look at how many physicians that we are targeting and the numbers that are actually prescribing, we still have a good delta there and so I do see that continuing.

Speaker Change: Especially with the field force.

Speaker Change: Coming in if they're covering our goal is really to drive the acceleration at these large idms I talked to you about the priority 100, but keep in mind, we actually target quite more than that I, just keep referring to the priority and there are many other ideas that are also prescribing and are also expanding and extending.

Alisha Alaimo: The second part of your question was around duration. You know, it's interesting with this, and there have been a lot of conversations with many of these prescribing sites. Physicians have very specific and explicit expectations with patients that when they go on this therapy, their expectation is that they come in every two weeks to get their IV infusion and that they stay on product. And what we've seen thus far and what we believe to be happening thus far is that patients are staying on product.

Speaker Change: And the second part of your.

Speaker Change: Question was around duration and duration you know what's interesting with this and theres been a lot of conversations with many of these prescribing sites.

Physicians lay very specific.

Specific an explicit expectations with patients that when they go on therapy.

Speaker Change: Their expectation as they come in every two weeks to get their IV infusion and that they stay on product and what we've seen thus far and what we believe to be happening. Thus far is patients are staying on product we hear that as feedback from the physicians. We also hear that as feedback.

Alisha Alaimo: We hear that as feedback from physicians. We also hear that as feedback from the numbers that we see, the data that we see. So, so far, with duration, the plan is that they're keeping patients on the product. I think there are questions out there as to what to do about duration, but in the absence of any data, physicians are keeping patients on it.

Speaker Change: The numbers that we that we see the data that we see so so far with duration. The plan is that they are keeping patients on product I think there are questions out there as to what to do about duration, but in the absence of any data physicians are keeping patients on.

Alisha Alaimo: Thanks, Alisha, and thanks to all of you for joining us today for the call. The IR team, of course, is available for follow-ups. Have a good rest of your day.

Speaker Change: Alright, Thanks, Alicia and thanks to all of you for joining us today for the call and the IR team for US is available for follow ups have a good rest of your day.

Operator: This does conclude today's conference. We thank you for your participation.

Speaker Change: This does conclude today's conference we thank you for your participation.

Speaker Change: [music].