Q1 2025 Biogen Inc Earnings Call
Please stand by, your conference is about to begin. Thank you very much.
Melinda: Good morning, my name is Melinda, and I'll be your conference operator today. At this time I'd like to welcome everyone to the Biogen First Quarter 2025 earnings call and business update. All lines have been placed on mute to prevent any background noise.
Melinda: After the speaker's remarks, there'll be a question in the answer session. If you'd like to ask a question during this time, simply press star 1 on your telephone keypad.
Melinda: Please lend yourself one question to allow other participants time for questions. If you require any further follow-up you may press star one again to rejoin the queue. Today's conference is being recorded.
Speaker Change: Thank you. I would now like to turn the conference over to Mr. Tim Power, Head of Investor Relations. Mr. Power, you may begin your conference.
Speaker Change: Thanks Melinda, good morning, and welcome to Biogen's first quarter 2025 earnings call.
Tim Power: During this call, we'll make forward-looking statements which involve risks and uncertainties that may cause actual results to different materially from our forward-looking statements. [inaudible]
Tim Power: We provide a comprehensive list of risk factors in our SEC findings, which I encourage you to review. Our earnings release and other documents related to our results as well as reconciliation between Gab and non-GAAP results discussed on this call can be found in the investor section of biogen.com.
Tim Power: We've also posted the slides or a website that we'll be using during the call.
Tim Power: On today's call, I'll be joined by our president and chief executive officer, Chris Viehbacher, Dr. Priya Singhal, our head of development, and Robyn Kramer, our chief financial officer.
Tim Power: We'll make some opening comments and then we'll move to the Q&A session until I have to get through as many questions as possible. We kindly ask that you limit yourself to one question. I'll now turn the call over to Chris.
Chris Viehbacher: Thank you, Tim. Good morning, everybody. May we first warm welcome to Robyn. This is your first quarter as CFO of Biodin Robyn.
Chris Viehbacher: So we had a very good start to the year, strong quarter. [inaudible]
Chris Viehbacher: You know, Biogen is really a tale of two companies in my view. There's one company which has been an MS company and that portfolio, as you all know, has been gradually declining.
Chris Viehbacher: that's now gotten to be about 45% of our product revenue. Thank you.
Chris Viehbacher: And those products mostly have a very long runway to continue to grow.
Chris Viehbacher: We've been talking about it for a few years but I think now this is actually starting to become visible.
Chris Viehbacher: We're rolling these products out worldwide. We had the approval of Lakambi in Europe , for example, which is very important approval for us, but we've also seen the approval of Skyclaris in the UK and Brazil.
Chris Viehbacher: Of course, the next lever of growth is going to be our pipeline, and there we're very happy to get the FDA fast-track designation for our ASO targeting bib 80.
Speaker Change: That's remarkable since that we haven't actually even read out phase two yet, and I think is a sign of confidence and the importance of this potential new medicine treatment of Alzheimer's. And of course, we've initiated the phase three transcends study for Felsardermab in AMR.
Speaker Change: and of course we've all said we've got a very strong balance sheet and we're going to continue to
Speaker Change: To patiently and in a disciplined way augment the pipeline through external innovation and we're very happy about the partnership that we built with. Thank you very much.
Speaker Change: on Zorro Renusson and Dravee Syndrome with Stoke. That's going to be an important medicine. We have that for the territories outside the United States.
Speaker Change: Now if we turn to where we are on these new product launches, [inaudible]
Speaker Change: So look at that 96 million. That's almost a hundred million dollars now we're into serious product territory. We have, as I said, obtained the marketing authorization in the EU and
Speaker Change: It's not just because of the market potential in the EU, but now we can say that this is a drug that has been recognized for its importance, its efficacy, its safety profile by all major regulators in the world. This is a drug that has been recognized for its importance, its safety profile, its safety profile by all major regulators in the world.
Speaker Change: And that's an important sign of confidence. This is again the first disease modifying agent that has ever been approved in Alzheimer's. This is a brand new territory. And I think having that kind of regulatory endorsement is extremely important.
Now, as we all know, this has been...
Speaker Change: been a challenging product to launch, given the workload that disemplies for the treating physician.
Speaker Change: and we're looking very much forward to a number of the innovations that are coming along that we think can actually reduce that workload.
Speaker Change: First, of course, is one we have in the bag in the first quarter, which was the approval for the IV maintenance, which will allow us to reduce the dosing for patients after 18 months of treatment to once per month.
Speaker Change: then we're going to make that even easier for physicians with hopefully an approval in August for the subcutaneous formulation.
Speaker Change: and that offers the potential of at-home administration with an auto-injector. And, of course, in the first half of next year, we're looking forward to the approval, hopefully, again, of the subcutaneous formulation for initiation, which will dramatically reduce the need for...
for Infusion Bed Capacity,
Speaker Change: In addition, of course, this isn't related to ASI or Biogen, these are independent companies but there are companies who are pursuing...
Speaker Change: Approval for biomarker tests, blood-based biomarker tests, and hopefully at some point we'll be able to see those blood-based biomarkers supplant the need for pet scans and or lumbar punctures. So there's an awful lot of...
Speaker Change: of Catalyst coming for LeCambi. But we're very much encouraged now that we've got critical mass behind this.
Speaker Change: We've also launched a new approach on commercialization from 1st of April .
Speaker Change: We and our partners, ACI have spent a lot of time going back through the data.
Speaker Change: thinking about the lessons learned and have adapted our commercial approach. And one of the things, for instance, that we will be doing this year is now starting direct patient engagement in Alzheimer's.
Now switching to Zerzuve, [inaudible]
This is a product that continues to do nicely, where Q1 fails of 28 million.
Speaker Change: Since launch, we have now been able to treat 10,000 women with PPD, and the majority of those prescriptions are actually first-lined therapy for postpartum depressions.
Speaker Change: So, a lesson that we learned along the way was actually the physician who is the most important in the treating postpartum depression is actually not the psychiatrist but the OB-GYN.
Speaker Change: So 80% of our scripts in Q1, for instance, were from OBGYNs.
Speaker Change: One of the most important things here is that you're talking about a one-and-done treatment essentially.
Speaker Change: and so to make this commercially viable you actually need to have writers expand and we did see that so we were able to expand the number of physicians writing this by 20% in Q1, but more importantly it's getting physicians to write repeat prescriptions.
Speaker Change: and one of the most encouraging things is that we are not only seeing the repeat prescriptions.
but I think as...
Speaker Change: Physicians gained the experience with Zerzuve. They are also gaining the confidence to actually go and be more proactive about diagnosing postpartum depression. And so I think we're actually seeing a virtuous cycle here where this positive response by patients is encouraging. And I think we're seeing a positive response to this positive response by patients.
Speaker Change: You know, a greater attention to a disease that unfortunately I think has been sadly neglected for so many women, so...
Speaker Change: very good progress on Zerzu Ve, we've completed our own field expansion at Biogen, and that's been in place and said the middle of the quarter. Now if I turn to Skyclaris,
Speaker Change: We had worldwide sales of $124 million, that's up 59% year over year and 21% quarter on quarter. We did have some effect from the IRA, you all know about the Medicare tax that has been put in place and that had an effect actually our gross sales.
Speaker Change: in the U.S. Rose Foster, then our net failed in this quarter.
Speaker Change: You know, one of the things about this disease, of course, is that this is an European origin as a genetic disease.
Speaker Change: and essentially where you find the patience is where all the European explorers went in the world.
Speaker Change: and, but, logically, of course, and the biggest number of patients is in Europe .
Speaker Change: And there we have had an awful lot of success in finding patients. It's actually, I think, easier to find them in Europe because they tend to be in centers, whereas they tend to be all over the country in the US.
Speaker Change: But even in the US, our US team has been very creative in thinking about new tools to identify where patients are.
Speaker Change: and find them. I can remember years ago, with the acquisition of Gensheim, learning the key.
Speaker Change: Marketing Component of Rare Disease, and that is Finding Needles and Hastaxe, and that's what this is all about is...
Speaker Change: is looking through social media, following family trees and looking for patients. And so how are we doing on that if I could see the next slide? You can see that we've got a nice steady growth in patient numbers. We've got about 2,400 patients on therapy globally.
Speaker Change: It's now available in 26 markets. I would caution that not all of those patients yet are paying patients. We have had an approach of having early access programs in countries to ensure that patients benefit from treatment as soon as possible. And we are following up then with negotiations on a country by country basis.
but the uptake is very satisfying. [inaudible]
When you think about the penetration into this market...
as we benchmark this.
Speaker Change: The penetration is actually much higher than the average analog rare disease launch.
and actually in line pretty much with the Spin Raza launch.
Speaker Change: I wasn't here for that, but as we've gone back and looked at it, the Spinoza launch was actually one of the best, if not the best.
and the launch of a rare disease product. So,
We're very happy with the progress of SkyClaris.
Speaker Change: Brazil approval is actually a very important market for us. There are a lot of patients in Brazil again going back to...
Speaker Change: where Europeans went in the world and having been in Brazil last year and met with a number of physicians. I know that this approval will be the very welcome to the patients there. Moving on to the pipeline.
Speaker Change: You know, I think we've made an awful lot of progress here as well. You've heard me say I think time and time again that
Speaker Change: You know, I think we had an extremely high risk pipeline when I came here. First of all, it was highly concentrated in neuroscience.
Speaker Change: and that's always an issue when you only have one therapeutic area, but neuroscience was also a little complicated because
We don't always understand the underlying disease biology.
Speaker Change: The slowly progressing nature of those diseases mean that you often couldn't do a phase two study, and so you go immediately into a phase three study. So you end up doing incredibly expensive proof of concept studies as phase three. [inaudible]
Speaker Change: Now, neuroscience is who we are and we've not wanted to abandon that by any means there's huge unmet need.
Speaker Change: but we did feel that we needed to add another pillar to our company's future growth, and the logical place to go with immunology. We've been an immunology since the founding of our company, particularly through MS, and I quote my—
Speaker Change: My good friend and former colleague, Elias Sohuni, who often said we describe too many diseases by their symptoms and not by their cause, and when you get into immunology actually, what's important is really the immune pathways, and that can lead you into a whole number of different indications.
Speaker Change: And that is something that Biogen actually understands very well. And so, you can see on the left chart, we've been able to balance this now. We have got a nice balance between neurology, which has been the pride in home of Biogen for many years. But also, I think immunology where I think we have a very strong right to play. Okay.
Speaker Change: and then, of course, with that, concomitantly, if you look at the right chart, in the immunology, one of the things you can do is do a proof of concept. And, you know, Phelzardomab is probably the best example of that. That is an ideal product where
Speaker Change: We've been able to get a very strong proof of concept. There is never a guarantee in any clinical trial as all of you know, but I think as we look at the Phase 3 clinical trials,
Speaker Change: Phil Zartemab, that we feel a whole lot more confident about that than some of the other trials where, again, we haven't had that. And so as you look at our pipeline, I think if I could go to the next chart.
Speaker Change: You know, first thing I would point out, we have five phase three studies that are initiating this year.
Speaker Change: And that's important from a number of points of view. First is obviously there's a huge potential that is behind all of those products and we're getting into late stage development. So it's a sign of maturation of our pipeline.
Speaker Change: But the second thing is we're also increasing the number of shots on goal. We're not dependent on one or two projects. And we're going to continue to build that. And I guess the third thing I would point out is we have a number of data readouts that are coming. [inaudible]
Speaker Change: and so as we move into Phase 3, we'll be able to also have some important readouts already in 2026.
Speaker Change: and I think that's a nice cadence that is going to help underpin the continued emergence of that new biogen. So I think very good progress and Priya is going to talk more about that.
Speaker Change: and then I guess the last topic I would just cover is one that I think is on everybody's mind, which is tariffs.
Speaker Change: It's a new topic for us all. In 35 years in this industry, I've never had to spend as much time as we as a team have on tariffs in the first quarter.
Speaker Change: and I did want to point out a number of features of Biogen, which I think differentiates Biogen from some of our colleague companies in the industry.
Speaker Change: and a number of you have been using, for instance, the tax rate as a surrogate for what the tariff exposure might be, and I would submit to you that that's actually not appropriate in the case of a biogen.
Speaker Change: and it's for a couple of important reasons. The first is that...
Speaker Change: When you look at our product sales, 75% of our 2024 US product revenue was attributable to products that already have manufacturing operations in the US. And in fact, Biogen actually exports more than we import.
rates.
But the other structural difference
Speaker Change: is that approximately 55% of our 2024 product revenue came from countries outside the U.S.
Speaker Change: Now that's pretty unusual in our business. Most of this industry, what you see is 60 to 80% of product revenues come from the US. Biogen is a whole lot more diversified and that's really a function of the products that we have.
So as we look out for 2025, [inaudible]
Speaker Change: You know, obviously there is an exemption for the moment in place and we know that the whole tariff situation is changing daily and it's difficult to predict.
Speaker Change: But at least what we can say is, even if we lost the exemption and all of those tariffs that were announced by the U.S. Administration on April 22nd were to actually not only come into being, but also apply to pharmaceuticals, this would still not affect our 2025 financial outlook. [inaudible]
Speaker Change: That's partly because of the long supply chains we have. It's partly because I have to credit our supply chain team.
Speaker Change: They built levels of inventory, not just of products, but also of different ingredients and materials because again this is a highly complex area.
Speaker Change: But just structurally, we are more of a US-based company and always have been and actually we're quite proud of that. So with that, I'm going to pass that on to Priya to pick up the story on R&D.
Thank you, Chris.
Priya Singhal: This quarter, we made significant progress, advancing and expanding our high conviction late stage pipeline.
Priya Singhal: We believe our pipeline will play a critical role as we work to deliver sustainable long-term growth enabled by increased momentum in our day-of-floor.
Priya Singhal: This includes potential key approvals this year and expected registration data starting next year.
Priya Singhal: This quarter, we delivered key milestones across Alzheimer's, immunology and rare disease.
Speaker Change: First, as Chris mentioned, our tau-targeting ASO Bib-80 received past-track designation from the FDA in Alzheimer's disease in April .
Speaker Change: Azamos is a complex and fatal disease that we believe will require multiple therapeutic approaches to address its diverse pathologies.
Speaker Change: Biberi is a differentiated approach to targeting Tao, and the fast track designation was based on encouraging phase 1 B data, which showed those dependent CSF Tao reductions.
Speaker Change: Decreases in Cowpat signal and favourable trends on exploratory, cognitive and functional measures.
Speaker Change: In Immunology, we initiated the Transcend phase 3 study of Phelzardomab in AMR.
Speaker Change: This is the first of three-phase-three studies that we expect to initiate this year for Phyllis Ardomab with additional studies in IGAN and PMN anticipated by media.
Speaker Change: And importantly, we expanded our late stage rare disease pipeline, where we acquired rights to Zoro Venerson in Dravee's syndrome, in all territories outside the United States, Canada and Mexico.
Speaker Change: Robyn Sinrom is a developmental and epileptic encephalopathy characterized by severe recurrent seizures and importantly significant cognitive and behavioral impairment.
importantly, more than 90% of patients
Speaker Change: continue to experience seizures despite treatment with the best available anti-seizure medicines, and there are currently no medications approved that meaningfully address the underlying cognitive and behavioral aspects of the disease. [inaudible]
Speaker Change: Zorobyn Urson is an investigational ASO that is designed to potentially, for the first time, treat the underlying cause of the race syndrome by increasing the NAV 1.1 protein production in brain cells.
Speaker Change: What encourages us about this asset is the phase 1-2-A data that we've seen.
Speaker Change: Specifically in respect to cognition and behavior as well as seizure. [inaudible]
Speaker Change: and looking at the right-hand side of the slide, you can see why. [inaudible]
Speaker Change: Cores on the Wineland 3, a widely used standardized assessment of behavioral outcomes show that Zorovenersen resulted in substantial improvements across multiple measures of cognition and behavior.
Speaker Change: This was initially observed within the phase one to a study with continued improvement in the open label extensions out two years.
Speaker Change: We believe these results support the potential for Zorobe Nurson to be the first disease modifying therapy in Ravi's syndrome.
Speaker Change: We look forward to working with Stoke on advancing the Phase 3 Emperor Study, which we expect to initiate in the next few months.
Speaker Change: We continue to remain focused on advancing the standard of care in Alzheimer and I believe we've made significant progress.
Speaker Change: Starting with Lakambi, we are really excited about the recent approval in Europe .
Speaker Change: We're also continuing to advance the subcutaneous formulation for both treatment maintenance and initiation to further aid patient optionality and convenience.
Speaker Change: Furthermore, we believe that the strength of the Lakambi real-world data continues to support the urgency to treat symptomatic early AD patients today.
Speaker Change: and we look forward to the potential of blood-based diagnostics to help remove barriers in the healthcare system.
Speaker Change: I also believe it is important that we continue to execute on the opportunity in pre-symptomatic ED.
Speaker Change: Clarity AD established that removing plaque in a symptomatic early AD population leads to clinical benefit.
Speaker Change: and that symptomatic patients with low or no-tow can potentially achieve an even greater benefit.
Speaker Change: and we believe a head three four five is the right study design to evaluate the potential benefit of the can be in a true pre-symptomatic population.
Speaker Change: Beyond Lakambi, we continue to treat target Alzheimer's disease biology with a potential next wave of therapy, including Vibedi and novel delivery technologies.
Speaker Change: Overall, I'm encouraged by the progress we're making in Alzheimer's, and believe we are well positioned to lead the evolution of the treatment landscape.
Speaker Change: Turning to the pre-proof of concept pipeline, I'm excited again about the progress we've made in rebuilding this area of the pipeline.
Speaker Change: We are applying a strong scientific rationale as we invest in these programs using a disciplined, data-driven decision-making approach as we aim to build out a sustainable pipeline with a promising complete PEOC pipeline.
Speaker Change: During this quarter, we made significant progress in this area, including completing enrollment in the phase two study, for our lack to inhibitor, for idiopathic Parkinson's disease with Denali.
Speaker Change: Applied our approach to follow the science, these phase two data which I expected next year will help provide us with clarity on the potential path forward to phase three.
Speaker Change: We will continue to maintain this approach as we work to grow the pipeline by introducing more assets into the early stage development both from our organization as well as external innovation sources.
Speaker Change: With that, I would now like to hand the call over to Robyn for a financial update. Thank you, Priya. I'm pleased to be participating in my first earnings call since stepping into the CFO role.
Robyn: I'd like to begin by extending my gratitude to those in the investment community with whom I've had the pleasure of speaking with in my first few months as CFO , and I'm looking forward to spending time with many more of you in the near future.
Robyn: To start, I would like to provide a few highlights on our first quarter financial result. Please note, the comparison of them about to make are versus the first quarter of 2024 unless otherwise noted.
Robyn: Total Revenue for the first quarter of $2.4 billion was up 6% year-over-year, aided in part by the timing of Spenraza and corporate partner revenue shipments.
Robyn: Our four launch products delivered approximately $200 million of revenue in the first quarter, an increase of 22% quarter over quarter, and more than doubling year over year.
Robyn: First quarter non-GAAP deluded EPS with $3.02, which was down 18%.
Robyn: This includes the $165 million upfront paid in connection with the Stoke Transaction, which impacted EPS by approximately 95 cents in the quarter.
Robyn: Absent that charge, first quarter non-GAAP diluted EPS would have been $3.97 up 8% year-over-year.
Robyn: In the first quarter, we generated $222 million of free cash flow, which includes the $165 million dollar upfront paid to stoke.
Robyn: We ended the quarter with $2.6 billion of cash. Shortly, I will provide an update on our full year guidance.
Robyn: Now I'll turn to a few comments on revenue and commercial dynamics in the first quarter.
Robyn: Starting with our MS franchise, our global product revenue declined 11% year-over-year, driven primarily by competition. This included impacts from a bio-similar for de-sabri in Europe , and generic competition for tech federa globally.
Robyn: We have started to see generics launch in certain countries in Europe , such as France and the Netherlands.
Robyn: We will continue to vigorously defend our IP. We do expect to see further impacts from tech
Robyn: A bright spot for MSNQ1 was Vumerity, where we saw an increase in demand and Vumerity remains the number one branded oral therapy.
Robyn: For Spenraza, we continue to be encouraged by the consistency and demand globally, which includes growth in the US a 4% year over year.
Robyn: In the first quarter, ex-US Benraza revenue benefited from a one-time VAT refund and the timing of shipments in certain markets, which together was a benefit of approximately $26 million versus Q1 of 2024.
Robyn: And as I mentioned earlier, our four launch products together delivered $200 million of revenue to Biogen in the first quarter. An increase of 22% quarter of a quarter and more than doubling year over year.
Robyn: We continue to see steady sequential growth of LaKembe with first quarter global end market sales booked by AXI of approximately $96 million, up approximately 11% sequentially from the fourth quarter of 2024.
Robyn: Global Skyclaris revenue was $124 million, a sequential increase of 21% versus the fourth quarter of 2024, driven by continued geographic expansion outside the U.S.
Robyn: Revenue for Skyclaris in the U.S. with $69 million impacted by expected Medicare discount dynamics, partially offset by demand growth.
Robyn: and both Cersor Bay and Kelsati continue to grow sequentially driven by increases in demand for each product.
Robyn: The increase in corporate partner revenue in the first quarter was driven by the timing of certain batch commitments related to our contract manufacturing business, some of which was associated with batches of laquembee.
Robyn: We continue to believe that corporate partner revenue will be roughly consistent when comparing full-year 2025 with full-year 2024.
Robyn: Due to planned maintenance activities and the timing of batch releases, we expect minimal corporate partner revenue in Q4.
I'll now turn to a few comments regarding expenses.
Robyn: First quarter non-GAAP cost of sales was impacted by increased lower margin contract manufacturing revenue.
non-GAAP Core Operating Expense, or R&D plus SGNA Expense.
Robyn: Decreased 1% year-over-year as benefits from our R&D prioritization and fit for growth initiatives allowed us to absorb incremental spend associated with our advancing and expanding development pipeline as well as our product launches.
Robyn: non-GAAP operating income included approximately $201 million of acquired and processed R&D charges, including the $165 million upfront payment made in connection with the Stoke transaction, which had an approximately 95 cent impact to EPS.
Robyn: Excluding the $165 million upfront payment, non-GAAP operating income would have been $748 million, up 7% year over year.
Robyn: As a reminder, we and our peers are required to present upfront and milestone charges in gap and non-GAAP operating results.
Robyn: Commencing this quarter we will break out acquired and process R&D, including upfront some milestones in a separate line item in our P&L, consistent with many of our peers.
Robyn: We believe this provides better transparency about our core R&D activities and business development activities.
Robyn: We plan to disclose the schedule of expected charges for each quarter ahead of our earnings calls to aid in modeling.
Robyn: Now I'd like to provide a brief update on our balance sheet.
Robyn: We generated $222 million of free cash flow in the first quarter, which takes into account the aforementioned $165 million upfront payment to stoke.
Robyn: We ended the quarter with $2.6 billion of cash and approximately $3.7 billion of net debt. And believe there a balance sheet remains strong allowing us to continue to invest in both internal and external growth opportunity.
Robyn: Turning now to guidance where we're pleased that our expected underlying business outlook for the year has not materially changed.
Robyn: We are updating our full-year EPS guidance to reflect the approximately 95-cent impact from the stoke transaction, along with 20 cents of an earnings tailwind from foreign exchange impacts from a weaker U.S. dollar.
Robyn: We now expect our full year 2025 non-GAAP , diluted earnings per share to be between $14.50 and $15.50.
Robyn: We continue to expect total revenue for 2025 to decline by a mid-single-digit percentage, to have been primarily by an increase to decline in our MS business.
Robyn: We expected our launch products will generate sequential revenue growth, but we expect the absolute MS revenue decline to be steeper than this growth in 2025.
Robyn: As a reminder, we expect a potential biosimilar entry for Tisabri in the US, which we believe could occur sometime in the fourth quarter of this year.
Robyn: and as I mentioned a few minutes ago, we have started to see generics protect Federa, enter in Europe , and while we will continue to vigorously defend our IP, we do expect to see further impacts from generics in Europe this year.
Robyn: As I noted earlier, we believe that Corporate Partner Revenue will be roughly consistent when comparing full year 2025 with full year 2024 due to planned maintenance activities in the timing of batch releases, we expect minimal Corporate Partner Revenue in Q4.
Robyn: We believe we are on track to deliver the $1 billion of growth savings and $800 million of net savings under our Fit for Growth Initiative.
Robyn: As you can see on the slide, many of our guidance considerations have remained the same as when we guided for the year, back in February . I will also refer you to our press release for other important guidance assumptions. Thank you very much.
Robyn: Biogen currently does not expect a material impact in 2025 from potential tariffs as announced by the administration, US administration on April 2nd, 2025, even if the exemption for pharmaceuticals were to be removed.
Robyn: This is based on both a significant portion of U.S. revenue being derived from products which have manufacturing operations in the United States as well as our current global inventory position.
Robyn: Arguidance Range also considers potential retaliatory tariffs from China as announced.
Robyn: However, the U.S. and international tariff landscape remains uncertain, and our guidance does not contemplate any new tariffs that may be announced in the future. [inaudible]
Robyn: I will also note that when excluding one-time tax impacts, our tax rate is broadly a function of our business mix and therefore does not serve as a good proxy for estimating potential tariff impacts.
Robyn: Biogen's effective tax rate is a reflection of our U.S. market revenues being almost entirely taxable in the U.S. at the full federal plus state tax rate.
Robyn: We also generate a relatively high percentage of our revenue outside the U.S. which is taxable in those markets and in the U.S. under the Guilty Regime.
Robyn: We will continue to monitor and analyze the current and future US and reciprocal tariff landscape as it evolves.
Chris Viehbacher: I'll now pass the call over to Chris for some closing comments.
Speaker Change: Thank you, Robin. Again, if I come back to where is Biogen going, you just have to look at our pipeline. We've got another four phase three starts after the...
Speaker Change: Face Restart already in AMR. We've got three clinical trial readouts coming. We've got three regulatory decisions coming.
Speaker Change: One of the other things I'll say is in this first quarter is we did a major restructuring of research, and I'm really quite excited about what we're doing there, you know as an industry we rely way too much on light stage business development. [inaudible]
Speaker Change: The most cost-effective place to do collaborations is actually pre-clinically and we have a goal of signing four to five new research collaborations this year.
Speaker Change: Just on research, Biogen has been known for breakthrough medicine. In fact, all four products that we launched in 2023 and 24 are first in class, first ever disease modifying agents.
Speaker Change: and we go after some of the hardest to treat diseases. But one of the problems about being breakthrough is that you're in diseases where
Speaker Change: A lot of the investment committee is not already doing a lot of research.
Speaker Change: If I take AMR, the antibody mediated rejection, for example, there's really no treatment there today. And so, one of the things that I think we feel that we would like to do is do a deeper dive into some of these diseases. And-and-and-and-and-and-and-and
Speaker Change: Pipeline Assets, not with the intention of presenting new data, but to just say, okay, what's the competitive landscape? What's Biogen's right to win here? [inaudible]
Speaker Change: What's the patient journey? What is it going to really take to move the needle on one of these diseases? What's the reimbursement landscape going to be like? What's the epidemiology? If I look at AMR, for example,
Speaker Change: I think this is a huge opportunity for Biogen, and we saw 80% resolution of AMR in Phase 2 trials.
Speaker Change: We have a high level of confidence in that, but of course a lot of people are interested in the eye again. [inaudible]
Speaker Change: What's going to take really to be interested in I get? And I spend an entire day with our West Coast hub.
Speaker Change: just on Phil Zartemap, and there's a huge amount of things going on there.
Speaker Change: and even things like all CD-38s are not created equally. So what are they like? So we would like to invite whoever's interested to come to some of these thematic seminars. The first one was going to hold on June 11th.
and hopefully that will be the first of the series.
Chris Viehbacher: and it's just meant to be educational and a deeper dive and we'll have some of our top internal experts here on all of these subjects to answer any and all questions. So with that, Tim, I'll turn it back to you for Q&A. Thanks, Chris, and Melinda, can we go to our first question, please?
Speaker Change: Certainly, if you'd like to ask question, please signal by pressing star one on your telephone keypad. If you're using a speaker phone, please make sure your mute function is turned off to allow your signal to reach our equipment.
Speaker Change: 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. And your first question comes from Brian Abrams with the RBC Capital Market. Please go ahead.
Brian Agrams: Hey, good morning. Thanks for taking my question. Congrats on the recent Lecambi approval in Europe . Can you talk about what the roll-out strategy could look like there and your sense of what the reimbursement process and amenability could be? Thanks.
Brian Agrams: Yeah, thanks, Brian . Well, that is certainly going to take some time. You know, the fact that the approval took a while tells you that, you know, there's enough a lot of thought going into that.
Brian Agrams: You know, one of the things about when you first, when you launch a first-in-class disease-modifying agent is that you're not displacing anything in a budget.
Brian Agrams: So these types of products are incremental ads to the total healthcare budget of countries.
Brian Agrams: and so that's sometimes where it's easier to launch a product that's kind of a me too, that comes in and can simply cannibalize the budget of another product.
Brian Agrams: and a significant market in Europe . The Europe is an aging continent, even more so than the United States. So there are an awful lot of eligible patients. But we'll be taking that with our partners, a side market by market.
Brian Agrams: I do think that also the Kimby has run the gauntlet. I mean, there has been a full examination of the efficacy, the safety, but also the economic benefit. As you know, the EMA does take into account some aspects of
Brian Agrams: of the economic impact. So, I think that in some ways, this deep interrogation by all of the countries of the European Union, by the way, I think should actually, if anything, help us as we go into reimbursement because this has been fully examined and fully evaluated. But, you know, I think it'll be. [inaudible] I think it will be.
Brian Agrams: It'll still take some time and we'll go to some of the countries we'll launch clearly faster, as is the case generally in Europe .
Thanks Chris, let's go to the next question please.
We'll go next to Evan Seigerman with BMO Capital Markets.
Evan Seigerman: Hi, all. Thank you so much for taking my question. I want to touch again on Lakambi, but this time with the subcutaneous formulation, you know, make me remind us how-
Brian Agrams: that potential for at-home administration can help accelerate sales in the United States. We're seeing some good uptake, but I think that that could really help get things going further. And maybe some of the hurdles that you have to overcome to really get full penetration there. Thank you.
All right, so the first is subcutaneous for maintenance.
Brian Agrams: and, you know, these are patients who have been undergoing bi-weekly infusions now for 18 months.
Brian Agrams: and so I think there are two aspects for the commercial first is, you know, we are busy focusing on making sure that
physicians and patients understand the need to continue on therapy.
Brian Agrams: and there we have long-term extension data and we have demonstrated that in 36 months after treatment patients are still doing better on treatment than if they stop treatment so there's the whole establishment of the maintenance market.
Brian Agrams: But if, you know, these are also older patients and it's not always easy to get to and infusion centers. Obviously, we make it easier with once monthly dosing, but our view is that this is going to be more effective as a long term.
Chronic Therapy, if you have a patient-friendly administration like subcutaneous.
Brian Agrams: So I think as a first step, the subcutaneous really helps establish and extends the treatment life of a patient in maintenance. And then of course in the initiation phase.
Brian Agrams: that will be interesting to see, I think in major urban centers.
I think we may see that...
Brian Agrams: Some physicians may want to continue at least in the first few months. [inaudible]
Brian Agrams: of Therapy on Infusion, because they're time with the MRIs to monitor ARIA, and then move to subcutaneous.
Brian Agrams: I can imagine in more rural settings where getting to infusion centers is not as easy for patients, that the subcutaneous might even be right from the get-go. So I think it will depend a little bit on where you are as a patient, but there's no question that...
Speaker Change: You know, this is again a simplification of the physician's workload, you know, it's a heavy load to think about the pet scans or the lumbar punctures.
Brian Agrams: going to negotiate for use of the infusion beds which are often...
considered to be the domain of the oncologist.
Brian Agrams: and just from a caregiver point of view of bringing the patient to the infusion center, I think this will be welcomed by them as well, that they can do this at home. So I think this is an enabler for the patient but also for the physician. [inaudible]
Speaker Change: Melinda, can we go to the next question please? We got a Salveen Richter with Goldman Sachs.
Salveen Richter: Thank you, good morning, just following up on Evan's question here. Could you just speak to your thoughts on let him be uptick and grow from the Ford, not only with subcutaneous maintenance dosing in the second half, but also with food years, bios, and vitro diagnostic, which should enter the market as well. Thank you.
Yeah, we don't have that much information about the diagnostic.
Salveen Richter: You know, the process to get a diagnostic approved is different obviously than a drug. And then the reimbursement situation is also different. I do think the recent report by the Alzheimer's Association highlighted the need for early diagnosis. You know, one of the issues that has...
Salveen Richter: as I think in Alzheimer's is that patients, most patients are actually seeing their primary care physician, and it can take quite a long time.
Salveen Richter: for the physician to distinguish. Is this just part of the normal aging process? Is this some other form of dementia or is this Alzheimer's? And so two or three years can go by.
Salveen Richter: and sometimes even longer before the Alzheimer's diagnostic is done through a referral to a neurologist. Now, one of the things that that Alzheimer's report also pointed out is that there's a real interest in getting treatment earlier.
Salveen Richter: and that the earlier you can get to a patient before there has been too much neuronal damage or death.
Salveen Richter: DeBetter, and so I think there's a real effort to be done to really get those diagnostics established.
Salveen Richter: and so the benefit really is I think twofold. One is hopefully we can get patients on treatment at a much earlier stage of their disease and we believe, and there's obviously studies ongoing to actually gain the evidence of that but even...
Salveen Richter: You know, even the data that we presented at CTAD in 2023 of low-tow patients, which is surrogate for early stage patients, demonstrated that, you know, 60% of patients were stable after six months.
Salveen Richter: and actually 70% were stable after six months and 60% actually showed some level of improvement. So I think the blood-based diagnostics are going to be extremely important, but again we have to wait and see where those companies are in the regulatory process.
Speaker Change: Can we go to the next question please? The next question comes from Tim Anderson with Bank of America.
Tim Anderson: Thank you. On the Kimby, how are you seeing the market parsed out between your product and Louis Kissuma? Because obviously there's a very big difference in terms of commercial positioning around finite dosing. [inaudible]
Speaker Change: and I'm wondering who's going to kind of ruin that battle, and Chris, you answered an earlier question starting off talking about getting docs to keep patients on therapy.
Speaker Change: So the product, you're probably selling the market now for coming up on two and a half years. Are you actually seeing some prescribers take patients off therapy after a period under the idea that once a plaque is gone, you no longer need to give drugs. [inaudible]
Speaker Change: Yeah, I mean, I think first, I would say, you know, we would really consider the launch of this product to have been September of 23, because, you know, that's when we had full approval, we had...
Speaker Change: Re-embursement from CMS. In actual fact, we didn't even really get the question on the reimbursement for PET scans clarified till about November of that year. So I think we're still much earlier in that launch phase to you.
Speaker Change: on this versus dynamic. You know, it depends on the physician. And I think we're going to see those who like this idea of potentially saying, well, there's a finite point to this equally. Let's see.
Speaker Change: You know, what we have seen even at the recent ADPD, once you have a maintenance indication and you start to see the data, you start to realize that, well, actually, once you've reduced to remove the plaque, you're not done because there is some return of the plaque.
Speaker Change: and potential damage. So there will be obviously a lot of education to be done to demonstrate the importance of continuing on that. But I think at the end of the day, it's largely going to be up.
Speaker Change: to the physician and the patient. There will be patients where...
Speaker Change: Denanemab may be the right answer for them, depends on their fragility, their age, whether they're in a rural setting or an urban setting, and I think the market ultimately just gets split between us and Denanemab.
Speaker Change: The most important thing for both Lily, I think, and Biogen and Azai is that we start to really expand this market.
Speaker Change: We've got maybe, I don't know, 12,000, 13,000 patients somewhere in there on, on, on, on treatment.
Speaker Change: Less for Denanima, but they will get there. But when you consider the number of patients who desperately need treatment, we're still only treating a small fraction. And I think that's really got to be the focus of all the companies in this space is to really ensure that.
that more patients benefit from these disease modifying treatments. Thank you very much.
Speaker Change: We go to the next question, please, Melinda. Next up is Chris Schott with JP Morgan.
Chris Schott: Great, thanks so much for the question. I just would love a bit more elaboration on latest thoughts on business development in terms of...
Thank you.
Chris Schott: Yeah, thanks for that quote. I mean, I think there has been a shift even perhaps in the last, I would say four to six weeks.
You know, in a couple of ways, I mean... [inaudible]
Chris Schott: Valuation is one thing, but you're still really focused on getting the right thing. And what I think has changed is
Chris Schott: You know, you have a lot of healthcare investors who are facing a lot of pressure from LPs and I think
Chris Schott: They are looking for liquidity and I think we've had a lot of companies who you know not really wanted to do much because valuations are low and but we're also finding that there's a lot of companies who are struggling to get financing. [inaudible]
Chris Schott: So I think if you're looking to acquire, I think there might be a little bit more than ease in actually getting at least into a discussion, but I think even from a collaboration point of view,
Chris Schott: You know, I think one of the things we're going to see, and I think this is also where we're doing this in the early restate search collaborations. I think companies will be able to provide some of the funding as some of the venture capital and some of the other sources of funding dry up for other companies. And so there are opportunities in there. We're going to be able to provide some of the funding that we're going to be able to provide some of the funding that we're going to see.
Chris Schott: It still requires an awful lot of patience and discipline to work your way through and find companies that work together. I do think Biogen is actually well positioned. I'm one of the things I'm particularly proud of is we have this West Coast hub.
Chris Schott: which is essentially the high bio team, and we have been able to retain virtually everybody in that high bio team. Jane has hired our head of immunology.
Chris Schott: came from BMS who's out there on the West Coast and we're building out that team.
and so I think Biogen...
Chris Schott: just because of our own biotech roots is a company that knows how to do collaborations and I think can be a trusted partner in this. So I do think this is an opportunity but, you know, again, and we look at a lot of things.
Chris Schott: but even in this environment, you still have to stay disciplined. [inaudible]
Thanks, Chris. Can we go to the next question, please?
We're good at Michael Yee with Jeffrey.
Michael Yee: Thanks, good morning. I wanted to ask Priya about the early, ahead 3, 4, 5 study. I know that you've guided to a 20, 28 readout. Your competitor is also guiding to a readout, although I think there's an assumption that they may come earlier.
Michael Yee: Can you just talk about maybe one or two points about your positioning versus that study and particularly what would get you extremely confident that that's going to work and or read out because I know that you have an interim when I'm just going to assume you're not going to take that interim. Thank you.
Speaker Change: Yes, thanks, Mike. So overall, I would say I'd like to start by saying that, you know, with clarity AD, we establish that can be a clear splot and that translates to clinical benefit.
Speaker Change: Now with regards to the pre-symptomatic Alzheimer's disease area, it's a big spectrum.
Speaker Change: and we believe that a head three four five is truly positioned to provide a comprehensive understanding and evaluation of how Lecambi can preserve cognition across the full spectrum of presymptomatic AD.
Speaker Change: And the reason for that is that we are testing it in two parallel trials.
Speaker Change: The first one is a head three, which is about 400 subjects, and really by the inclusion criteria are 20 to 40 centiloids of amyloid.
Speaker Change: and then the other trial is greater than 40 centa-loids, which is the head core five amyloid levels. And there we're looking at whether it can prevent cognitive decline.
Speaker Change: So a head three is looking at can we stop the accumulation of amyloid has amyloid pet as the primary endpoint and then a head four or five is looking at preventing cognitive decline and we have a very sensitive clinical by endpoint called the back five with along with [inaudible]
Amaloid and Talpet, I think in contrast. [inaudible]
Speaker Change: Praleblazer, Alz-3, is really evaluating whether banana map can slow clinical progression in a mixed population.
Speaker Change: and this is by based on their baseline CDR global scores. So it pre-symptop, true pre-symptomatic is about 55% and they have included 45% of symptomatic patients.
So these studies are actually quite different.
Speaker Change: and we are looking at the entire range of pre-symptomatic patients with varying degrees.
Speaker Change: of Amloid. We will, we do expect, we fully enroll, we do expect to read out in 2028, we always reserve the optionality of looking at data earlier or such or not commenting on that right now, we are looking at a readout in 2028.
Speaker Change: Yeah, and I think if I could just from a commercial point of view, I do think the ahead study.
Speaker Change: and the risk-benefit equation becomes different at that point. And there is ARIA that is associated with both products. So you're going to have to answer the question about the risk-benefit of treating earlier.
and at what level of Amaloid burden?
Speaker Change: and I think that's going to be useful because the blood-based diagnostics will tell you that if there is a presence of amyloid, they won't tell you about how much. So at some point, you know, you're sort of say 55.
Speaker Change: You had a positive blood test, someone's going to send you for a PET scan to see how much amyloid you have.
and let's say you're at 50.
Speaker Change: Well, you know, are you in a watch and wait mode or do you actually treat? And unless you've actually done the study of looking at the full spectrum of amyloid burden, I'm not sure that physicians are going to feel comfortable about treating. So I do think, I do think actually ahead three and four or five are going to be really landmark studies in Alzheimer's. [inaudible]
Speaker Change: We go to the next question, please, Melinda. We're going to next to Umer Raffat, whatever core ISI.
Umer Rafat: about $21 million of sales in Q1, which is its second full quarter of launch, and this track slightly ahead of McKinby sales at the same time point. So my question is, has, has Biogen and E-Sy perhaps...
Speaker Change: who paved the way for a million terms of opening up health care infrastructure, and it may be perhaps could you speak to any competitive dynamics I play, and now that you're roughly 18 months into, thank you.
Speaker Change: Well, I think the answer is probably yes. You know, clearly, you know, there's been a lot of hard work and particularly the IDNs to work through the all the treatment pathways and protocols and
Speaker Change: Treatment Regiments that are needed. And so, you know, then now we're into a question of, you know, [inaudible]
Speaker Change: I think there will be cases where physicians are looking at both products. I think it'll be a question of who gets initiated. I don't think we're seeing any switching going on here, so it's really a question of which one are you going to start on and then stay on.
Speaker Change: I think the bigger question is, can we actually collectively grow the market? And that's really what's most important. And I don't think we particularly want to get into just trying to duke it out over market share in a relatively still small market.
Speaker Change: There are a lot of patients out there, and we are not yet doing a full service to patients who are suffering. And so the more that we can get more centers up and running and better education, the better it will be for patients and actually for both companies.
Chris Leskas, and the next one, please.
Next up is Terence Flynn with Morgan Stanley .
Great. Thanks so much for taking the questions.
Speaker Change: Obviously there's been a lot of focus on the FDA under the new administration and I know you meet some comments about...
Thank you.
Full Center Commencement and Thanksgiving Exhibition
Speaker Change: Yes, thank you. Overall, I'll just make a high-level statement that based on our interactions on review meetings and requests, we're not really seeing any changes at a high level.
Currently, we remain on track.
Speaker Change: with our engagements. And with regards to Drubbe's syndrome, I think that obviously the data that we saw during diligence and which I spoke to as well today, for us that has been very compelling.
Speaker Change: That has been, you know, it has several aspects to it. First of all, this population, although it was a small, you know, open-label trial, I think what was important about it was that these patients were on standard of care. [inaudible]
Speaker Change: And unfortunately, the burden of disease is high in droves and they have a number of seizures sometimes 7 to 10 a week and they are on multiple medications, anti-seizure medications.
and in fact...
Speaker Change: We saw the impact of Zorova Nelson on top of standard of care. [inaudible]
Speaker Change: So the impact that we saw was 87% seizure reduction on top of background standard of care, full standard of care. And then that was durable allowed to about 76% when you look out six months.
Speaker Change: So that the data was important, but the other aspect to the question that you asked. [inaudible]
Speaker Change: is that Stokella already engaged with FDA, Europe , and Japan.
Speaker Change: So, we have regulator input which we have evaluated carefully, we have agreement on the approach and design to the Phase 3 Emperor's trial. So, we remain fairly confident that this is the right trial to conduct. So, let's go ahead and start the trial. So, let's go ahead and start the trial.
Speaker Change: and so we remain encouraged about where we are in our engagement not only with the FDA but global regulators and that the design is appropriate to really give us that answer on what we hope will be a disease-modifying therapy impact. Thank you very much.
Speaker Change: on Invis population. But I think to your broader question, I think certainly right now at Biogen, we have not really seen any...
Delays in our interactions with the FDA. [inaudible]
Speaker Change: You know, I personally am encouraged by some of the more recent comments by the new commissioner about a particular ultra rare and thinking about
Speaker Change: Sergeant Markers, and making sure patients get drugs earlier.
Speaker Change: and I think he seems to be more interested in innovating some of the process, I think about his statements on reducing the use of animals in studies, for example, and use of AI.
Speaker Change: You know, there's certainly a lot of change going on at the FDA and we're watching very carefully and you know obviously it's been some key leaders who have left and some reduction in staff but they say so far at least from a biogen point of view we haven't seen in the adverse effect to that and
Speaker Change: and perhaps some of the new perspectives of the new Commissioner, McAree, could actually be helpful to us.
Speaker Change: Thanks, Christopher. It's a no to busy morning, so maybe we can squeeze one last question in here. Another last question please.
We go next to Jeff Meacham with Citibank.
Jeff Meacham: Great morning everyone, thanks for the question. For Chris or Robyn, on manufacturing, you know Biogen has historically had a lot of capacity in the US going back to, you know, the original expectations. Thank you very much.
and Alzheimer's. [inaudible]
Jeff Meacham: I get the question, as we see more companies in Biopharma announced plans to, you know, onshore capacity. Do you guys view your own capacity or resources differently? I wonder, you know, if there's a short term opportunity to partner that's, that's not in the model. Obviously, all, of course, depends on what you have in excess. Thank you. Thank you.
Jeff Meacham: Yeah, we've actually recently, our main facility in solo turn, for example, we've recently, there we're actually...
Jeff Meacham: doing CDMO business to absorb capacity. Obviously, that doesn't help for someone looking in the US. In RTP, we actually do quite a lot of manufacturing already for third-party companies, and I think
Speaker Change: You know, even before I joined Biogen, I knew of the reputation of our RTP facility. It's a very high quality, very efficient site. So yes, I think we certainly will be open and looking for opportunities on that front.
Speaker Change: We have a good mix in both facilities between our own product manufacturing as well as those for partners.
Speaker Change: Well, thanks for your time, everybody. We really appreciate it, and if you've got more questions later today, just reach out to the IRG. Thank you.