Q3 2025 Biogen Inc Earnings Call
Banquet vial.
One of the nice things about immunology drugs is that they tend to offer you an opportunity to create a portfolio.
On a product.
Once as you follow these immunological pathways that can lead to a number of different indications and the beauty of that is of course that once you've been able to demonstrate safety. You can then very efficiently go into other indications.
And again, we expect to announce at least another one if not two further research stage deals by the end of the year. So if we can move to the next slide please.
I Love this slide.
When I look at this.
Look at the lines of extending all the way across the page I mean, the company our size 10 phase III or phase III ready programs.
And that covers five phase III and our needs.
And we've got a lot of conviction around this pipeline we've seen a lot of good data in phase II.
And we're going to close to now seeing a lot of the readouts out of that and one of the things that you probably don't think about is that these are not just 10 phase III program. This is also 10 launches.
If I take just.
Sells automobile as an example.
Therefore indications are that two of those.
And the N V I R transplant.
Those are in nephrology and.
Then of course, we've got Lucas coming along with three indications in lupus and of course, we're still in rare disease reserve in nursing we have.
Our next generation of spin Raza with sell in nursing and we're quite excited about whats coming along with <unk> <unk> and Tau, but all of those require now that we start building up.
Commercial teams building insights thinking about pricing thinking about value propositions. So a lot of activity going on inside the company.
Another thing I like to look at in terms of.
Trying to predict where the things are going to be a success or not is can we attract strong talent because people bet their careers when they come to our company and especially if it's a new product and I have to say I've been super impressed with the talent that we've been bringing them into biogen and that sort of says to me that people are willing to pet.
Their careers on these exciting new products and I have seen time and time again over my career that that often translates into into commercial success market research is important but I think some of these other other indicators are even more important so I'm told over the next slide so what do we have been trying to do over the last three years. The first is obviously.
Let's grow our new product launches and again, 67% revenue growth says this is a very strong performance, we've got the pending sky Clarice or do they.
Even cost Saudi.
When I look over the last trailing 12 months of almost $1 2 billion in revenue.
And obviously these products are all have long runways in terms of market exclusivity and in each of these these are first in the first nothing first in class, but first ever treatments in these areas. So we're actually doing an awful lot of market creation, but for those of you got a lot of commercial.
Since you know that creating markets is a lot tougher than just going into established markets and taking market share and I think that speaks to a lot of the commercial strength of our teams at Biogen.
Then, let's look at the profitability of our legacy business.
Yes, I think we beat on the top line this quarter because of MFS, but.
That's not all by accident.
I think we are beating just about every analog when youre looking at.
Products that have come to the end of their market exclusivity periods I think that speaks to the strong customer care I think it speaks to the strong loyalty of patients too.
Biogen's product, we are still the company that treats more patients with MF and any other company out there.
And one of the things that we shouldn't forget is it's not all legacy.
Amazing product here called <unk> that has been growing very strongly this year.
It's almost a half a billion dollar sales in the first nine months of this year.
This is a product that has market exclusivity well beyond the end of the decade and.
Proud to see particularly our U S team investing more into this business and that is that is responding well and it is really the only patent protected products still in the oral segment, which is which is extremely important part of the Ms market.
And then we've been very conscious of being.
Efficient.
We are going to deliver on this $1 billion of gross savings.
We were clear right from the get go that we would be investing some of that.
As part of the launch and our.
New products, but also in research and development.
You've seen our revenue growing but our opex growth was still flat over this year. Despite a lot of new investments, we have added products to our late stage development and we.
We are doing all of this recruitment for the commercial preparation.
Of all these launches that are now in phase III.
And then obviously.
If I look at our pipeline.
Have cut development costs by almost 25% in research by 40%.
And I would argue that we have a stronger pipeline than we did before and that's really a lot of what <unk> has done in terms of being very careful about which products, we put into development building conviction behind those.
I think as I look at the pipeline I would say, we've got a very exciting and a high conviction late stage pipeline one of the reasons that we're doing these early stage deals as I think we now need to build a <unk> an early stage pipeline and banquet is just one example of that.
We continue to generate strong cash flow.
And we continue to look at where the opportunities across the entire spectrum of about how we can grow our business.
We are very disciplined about where we put that cash flow everything that we want to invest in has to be something that contributes to growth.
So we're not perhaps we can earn a little bit more about our pipeline and I'll pass it over to preempt. Thank you Craig.
This year, we've made important progress across the development pipeline.
We are positioned to continue to deliver multiple expected milestones over the next 18 months.
As Chris noted.
<unk> focused on execution against our strategic objectives.
And then I have a few achievements I'd like to highlight some this quarter.
Importantly, as Chris mentioned, despite competitive recruitment for trials in the space. We have now fully enrolled both go past studies for <unk> and SME.
This allows us to now pull forward both expected Readouts from these studies into next year 2026.
Next we continue to advance two exciting new opportunities.
With solid knutsen, rather pivotal study design for pre symptomatic infants and the broader clinical development plan has been aligned with the FDA.
We are also engaging with ex U S regulators and expect to initiate the Registrational studies in early 2026.
We also continue to advance the Dod on lab in late MDI, where we expect to initiate a potential registrational trial in coming months.
And today, we announced an update on hydro spin rather than the FDA provided us with a path forward, we resubmitted trunking and now we have at <unk> in April 2026.
Over the last few years, we have transformed both late stage and early stage pipeline.
We have followed the science and secured proof of concept to advance high scientific conviction assets into potentially registrational status.
And as we prosecute the early stage assets, we continue to follow the science by testing the most important scientific hypothesis.
We now expect to deliver several readouts from our pre POC pipeline next year.
We're also focused on broadening the <unk> pipeline, both with internal research assets that we advanced <unk> stage like Big 142, I've actually greater.
And by also remaining deeply engaged in targeting external innovation, including our announcement last week as Chris mentioned to collaborate with Banco vials on a preclinical <unk> antagonist.
Turning to our late stage pipeline.
Encouraged by the breadth of opportunities to further scientifically advanced our assets, including our ability to educate on the profile of our innovative medicines with our data.
For example, this week at ACR, we presented important differentiated data.
From a positive phase III <unk> trial, showing a consistent clinically meaningful benefit across outcomes that are relevant for SLE patients and providers such as planned reduction fatigue morning, stiffness musculoskeletal pain.
As well as the mission.
And underscoring our comments that we made at our September Lukas seminar on the potential importance of <unk> for patients with SLE, including women of Childbearing age.
Resenting data demonstrating limited placental transfer in a pig preclinical settings.
Next I would like to spend a few minutes on the continued law can be development to deliver optionality for asthma, my Alzheimer's disease patients.
As you can see on the left side of this slide we have already been successful this year in delivering meaningful differentiated treatment options pellet Kennedy.
Today. It is the only anti amyloid therapy with a maintenance option as well as an at home subcutaneous maintenance option.
And we continue to advance our rolling submission to the FDA from the can be subcutaneous initiation.
The option for maintenance and the availability of subcutaneous delivery I'd also potentially relevant to look can be in the pre symptomatic 80 partners.
The ahead keep all five study as you can see here is an important study that aims to comprehensively evaluate can be in different stages of pre symptomatic EBIT would be appropriate scientific questions and the relevant primary endpoint.
Additionally, we have seen increasing momentum in the development approval and utilization of blood based biomarker.
See this is a key enabler that potentially simplifies the diagnostic Barclays.
We remain excited and believe the potential for Mackenzie in the pre symptomatic population can be an important opportunity for biogen.
In closing I'm in.
<unk> that look MB ahead key four five is just one of several important registrational readouts, we have over the next few years.
As you can see on this slide our high scientific conviction pipeline will play a critical role given the increasing momentum in our registrational data flow.
This will begin with Duke <unk> phase III Readouts in Italy next year.
In 2027 onwards, we will see multiple registrational readouts across several assets in diverse and important therapeutic areas.
With that I would now like the hand, the call over to Alicia for an update on our commercial business.
Thank you Maria and good morning, everyone. Today I'll review the commercial results, we achieved in Q3, beginning with our multiple sclerosis portfolio RMS business continues to deliver significant revenue, which provides the resources to invest in our growth products advanced our pipeline and achieve our vision for the new Biogen in the U S.
We saw strong performance, mainly driven by strategic actions to support <unk> growth and some one time events.
When we look at competitive dynamics globally, we are seeing increased impact of tested are generics in Europe and for Tysabri. We believe we are well prepared for a biosimilar entry in the U S.
Now turning to <unk>, which delivered another strong quarter with global revenues growing 82% compared with Q3 2024, underscoring its increasing impact on the Alzheimer's community World wide.
In the U S. Our team is working collaboratively with ASI driving strong execution and customer engagement, which we believe supported our prescriber base growing another 14% quarter over quarter.
This quarter, we sustained consistent growth of new riders and new patients Angela can be holds majority share as the number one prescribed anti amyloid treatment.
Throughout 2025, we estimate what can be captured roughly half of all the new patients treated with anti amyloid therapies.
Now with the launch of I click subcutaneous auto injector for maintenance like can be is the first and only anti amyloid treatment to offer an at home injection, giving physicians patients and care partners more options to continue to slow disease progression. Following the 18 month end.
Initial treatment period.
Early feedback from customers and payers has been positive and into next year. We will remain focused on securing part D coverage and supporting patient access to Mackenzie.
Last quarter, we noted that for the first time, we observed early signals, indicating the anti amyloid market grew with two players. We are encouraged that this quarter. Our data shows the market continued to grow by approximately 15%. We also shared the blood based biomarker.
The testing was advancing at a significant pace and here our physicians have pointed to a meaningful impact. They report blood test to help move from probable to definitive diagnosis more quickly, enabling hcp's patients and their families to focus more on the treatment.
Discussion.
We anticipate up to 350000, Alzheimers blood tests, this year and more than 60000 pet scans to date, which is a 75% increase compared to this time last year. Our data show early indicators that pet CSF positive tests are increasing.
Which we believe may be attributable to increasing use of all farmers blood diagnostics as a triaging tool.
As we previously noted we are educating HCP is about the quality of blood based biomarkers, including the performance of BMS that meet the requirements of the Alzheimers associations, new practice guidelines for amyloid triage and confirmation.
As we look to 2026, we expect what can this momentum will continue to be driven by our focused strategies, which we believe are already having a positive impact on intent to prescribe perceptions of efficacy and safety and health care providers understanding of the role.
<unk> of anti amyloid therapies.
Moving on to Sky Claris, where the launch continues to drive patient growth across all regions, including the U S and overseas.
<unk> is now available in 34 countries contributing to strong growth of 30% compared to the same time last year in the U S. As expected patients continue to grow quarter over quarter with quarter, three revenue being impacted by channel mix in the context of the IRA changes.
To Medicare.
As we shared in the past our strategy in the U S is to reach the remaining Friedrich ataxia patients their neurologists and PCP, which our data indicate are primarily based in the community. Our efforts are focused on delivering on the school as nearly two thirds of new patients in Q3.
Were prescribed by first time writers and roughly a quarter of new scripts were written by TCP.
Outside the U S. We remain focused on continued geographic expansion with multiple commercial launches planned in the first half of 2026.
Last turning to <unk>, which continues to perform above our expectations.
As we shared earlier this year, our expanded field team has had a meaningful impact delivering $55 million in the U S, which is 19% revenue growth compared to last quarter. We are also encouraged by the increasing breadth of writers, which grew 19% quarter over quarter.
And in quarter three eight.
80% of <unk> prescriptions were written as first line demonstrating health care providers belief in the value of therapy that provides rapid relief to mothers impacted by postpartum depression occur.
Across our portfolio I am proud of our teams for executing with discipline and delivering on our strategic priorities. Their hard work is helping us serve patient communities build new markets and drive sustainable growth I will now turn it over to Robyn for an update on our financial results.
Thank you Alicia.
I'd like to provide some key highlights about our strong third quarter financial results unless otherwise.
Otherwise noted each of the comparisons I make during my remarks are versus the third quarter of 2024.
We delivered 3% revenue growth this quarter driven by continued strong commercial execution.
Our four launched products generated $257 million in revenue in the quarter, representing a 67% browse.
We continue to see resilient performance from our U S. EMS business, which was favorably impacted by gross to net adjustments timing of shipments and strong demand growth for the Meredith.
This was partially offset by continued generic erosion of <unk> in Europe.
Notably the year to date cumulative revenue from our launch products has more than offset the year to date decline in our EMS product revenue.
This commercial execution combined with our disciplined operating expense management resulted in non-GAAP diluted EPS growth of 18% for the quarter.
We also delivered $1 $2 billion of free cash flow in the quarter.
Turning to our guidance I am encouraged by the strong business trends that we continue to observe in Q3.
This is reflected in our improved revenue outlook.
You'll note that our non-GAAP EPS outlook has been updated to reflect that stronger business outlook, while adjusting for expected business development activities that are expected to close in the fourth quarter.
I'll provide more details on this in a moment.
Let me cover some key components of our Q3 revenue performance.
Starting with our MS franchise and.
In addition to the strong commercial execution that Alicia discussed the merits benefited from approximately $22 million of favorable inventory dynamics and overall U S. MFS benefited from favorable gross to net adjustments of $38 million in the quarter.
Outside of the U S sales were primarily impacted by expected generic pressures protected era.
We continue to defend our IP. However, we observed an acceleration of erosion, particularly in Europe as generics continue to launch in new geographies, including Germany.
This combined with the channel dynamics resulted in a sequential net decrease in tech vadera revenue of $28 million versus the prior quarter in Europe.
On a positive note the year over year and quarter over quarter impact of the Tysabri IV Biosimilar in Europe is roughly offset by growing demand for our subcutaneous formulation, which has no biosimilar alternative and now accounts for more than 50% of all branded and Biosimilar that Elisa.
<unk> patients in Europe.
Her spend riser, we continue to be encouraged by the consistency in demand globally and as expected ex U S. <unk> was impacted by the drawdown of the inventory build from the first quarter. We continue to expect full year global spin rather revenue to be relatively similar in 2025 as compared to 2000.
24.
Turning to our launch products, starting with wet AMD, we continued to see steady sequential demand growth globally with third quarter end market sales booked by ASI of approximately $121 million.
As you will recall, we had a $35 million inventory build in China in the prior quarter, representing roughly six months in demand in the region approximately half of this build was drawn down in Q3. Therefore as expected there were negligible sales recognized for China in Q3 as demand was satisfied with.
Inventory in the channel.
We continue to expect demand in China in Q4 to be satisfied with this remaining inventory with minimal revenue generated in the fourth quarter.
Declarer saw continued growth globally with revenue increasing 30% from this time last year in the U S continued sequential patient growth was offset by approximately $6 million adjustment related to channel mix in the context of the IRR redesign related to Medicare.
We expect Sky Claris to continue to grow and we are working to secure reimbursement in certain European markets as well as in Latin America.
As Alicia noted we're pleased to see continued strong growth for <unk> driven by increased demand.
Now a few comments on the rest of the P&L.
Before I get into the quarterly dynamics I would like to highlight the variance shown here between GAAP and non-GAAP cost of sales.
GAAP cost of sales was $674 million up 6% year over year due to an approximately $100 million pre tax charge accrued in Q3 that related to a judgment on genentech's claim for past royalties and interest related to the fabry without this impact it would've been approximately <unk>.
$570 million, representing an 11% decrease year over year.
More broadly cost of sales benefited from favorable product mix from lower contract manufacturing revenue in Q3, 2025, which has a lower margin.
That trend is expected to continue through the remainder of the year due to the planned campaign timing of contract manufacturing that we have previously discussed.
non-GAAP core operating expense for R&D, plus SG&A expense is flat year over year was evident in our results is that we remain disciplined in our cost management as we continued to deliver on our R&D prioritization and fit for growth initiatives, while ensuring that we are supporting investments in our launch products and law.
Term growth potential.
Now I would like to provide a brief update on our balance sheet.
This quarter, we generated approximately $1.2 billion of free cash flow due to business performance and continued cost management discipline.
We exited the quarter with $4 billion in cash and marketable securities and $2 $3 billion of net debt.
Our financial strength gives us the flexibility to reinvest and strategic growth initiatives, including advancing our pipeline supporting product launches and exploring growth opportunities as we work to deliver the new Biogen.
Turning now to guidance.
We have updated our non-GAAP EPS guidance to reflect our stronger underlying business outlook and investment for growth from business development transactions expected to close in the fourth quarter.
As you know the SEC requires inclusion of acquired IP R&D charges associated with business development transactions, and GAAP and non-GAAP financial results.
Absent these onetime charges our business outlook has continued to strengthen in the quarter, yielding a 25 per share improvement.
Our updated full year guidance includes an approximately $1 25 per share impact for business development transactions that we expect to close during the fourth quarter, including the license agreement with Angela bio and the acquisition of <unk> Therapeutics.
The following are some key considerations underlying our financial guidance.
We expect sales to be roughly flat to up 1% as compared to last year at constant currency an improvement from our last guidance update in July.
This reflects strong business performance, including the resilient performance of the U S EMS business year to date.
We also expect increased competitive pressures on the ex U S EMS business to accelerate particularly for tech for there in Europe, where we expect a sequential impact in Q4 to be roughly double the erosion. We saw this quarter.
In addition, as we discussed in July we are investing to support exciting new pipeline expansion opportunities, including a new program for fell sort of map and N V I and its Alan nurse in Phase III study discussed by for you earlier in the call.
As discussed earlier on the call. They are also beginning to invest in prelaunch activities for our late stage high conviction pipeline and key initiatives such as direct to consumer advertising in support of our launch products.
We believe these investments position us to drive future growth, while delivering innovative solutions for patients.
As we look ahead to the fourth quarter, we expect operating expenses will be approximately $1 $1 billion.
This reflects the typical seasonality of our Q4 spending our ongoing investments to drive growth and our focus on cost efficiency.
It also reflects the progress we've made in our pipeline with the opportunity to invest in 10 programs either in phase III are expected to start phase III in the coming months.
We are encouraged by our progress towards delivering the new Biogen and we believe it's important to make these investments as we work toward our goal of sustainable growth and long term value to shareholders.
Importantly, we believe we remain on track to deliver the $1 billion of gross savings and $800 million of net savings projected under the fit for growth initiative by the end of 2025.
As I had mentioned previously we expect contract manufacturing revenue in Q4. This year it could be $10 million to $20 million due to planned timing of contract manufacturing batches versus Biogen innovator product manufacturing.
Be sure to review this slide and our press release for other important guidance assumptions.
And with that I will pass the call back to Tim to open up questions.
Robyn Cynthia could we go to our first question. Please.
Thank you.
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.
Your first question comes from Omar <unk> with Evercore.
Good morning, guys. Thank you for taking my question I wanted to spend a quick second on evoke trial, if I may and my question is.
A scenario, where we do see a trend.
How do you see that impacting the light can be franchise and even more importantly, how does that change your thought process around the portfolio offering you have in this space would you need to have a glib collaboration or an asset in house in a scenario like that thank you very much.
Yeah.
Well I think on the Scott, let's see what the results are in.
Yeah.
Where that's going to affect we've looked at that I think.
If it is positive.
We do think it is probably going to be more used in the primary care setting.
At an earlier stage.
We'll have to see what the again, what the results are but it doesn't seem like this would actually affect the amount of clock I do think as a company, though we are interested in having a full portfolio of products to achieve alzheimers seem that we have the <unk> program.
And.
Obviously working on bringing shuttle technology so.
We would probably evaluate that as and when the data are available. There is certainly no lack of GOP ones out there.
I can just add that I think what's really important here is that they are hypothesizing that neuro inflammation will play an important role and as Chris mentioned I think that it doesn't really target. The pathology. The important thing is that the bulk draws included patients on stable doses of Alzheimer's treatment, including the <unk>.
Lloyd antibodies. So we will be interested in seeing that data and what we also believe is that it will increase the awareness.
Of the disease and the need for treating disease early.
Thanks, Brad Let's go to our next question. Please.
Your next question comes from the line of Evan <unk> with BMO capital markets.
Hi, guys. Thank you so much for taking my question, taking a step back I'm really struck by your progress in immunology.
Just talk to me about how this renewed focus can drive growth and pipeline expansion to the end of the decade, and what can you do with Biogen to accelerate some of these programs.
Well, maybe I'll start.
When I came to Biogen I argued that we've always been in immunology.
Because basically a lot of diseases like Ms. We're treating by really trying to have an impact on the immune system.
Wanted out or our MS drugs don't even cross the blood brain barrier. So I would argue we've always been in immunology company.
Immunology is really an area that is really flourished over the last 10 years and I think depicts it was really one of the first drugs to really demonstrate.
The disease modifying capability when you when you follow those pathways and of course, they can lead into a wide range of activity. So that's an area. We understand in the short run I think we are more focused on rare immunology.
<unk>.
Overlaps with with areas that we already have some experience and I would argue for example.
With lupus.
Lupus is an extremely complex disease with a lot of different.
Since symptoms and things that affect patients and I think for the experience of Biogen has had in MFS will be directly applicable to lupus and I think we'll be able to develop that market in a way that the existing companies with their products haven't been able to do.
And I think over time.
We can we can actually build out a portfolio of <unk>.
Products that broadly affect the immunology, there's a lot of there's a lot of opportunity here, there's a lot that we still don't understand.
And as we look at kind of the the first the next five years.
They're more in this rare immunology, but if I look at a 10 year timeframe than I think we can go into broader indications and vanquish is just one example of.
Bring in an asset that could actually have multiple indications and I think youll see us do more of those and again.
These are areas, where you really have to have.
Deep scientific understanding of how these pathways work.
They can be.
There are a lot of things that crossover.
One of the things that we do.
Just see even in diseases.
<unk> two microglia.
And things like that.
That actually crossover diseases.
Crossover I think is something that we can bring to the immunology part as we go into different indications even with sales argument for example, although we're in for kidney indications. We're looking at another three indications that have nothing to do with kidney and again, because we understand things like north filament and other things we think that we have.
Perhaps some insight that will allow us to develop medicines that other companies don't so for US. It's it's a core area, we're not abandoning neuroscience by any means and we still have a very strong <unk>.
Investment in Alzheimers and Alice we still have a big one going on in Parkinson's as well, but I do think immunology is a great space for biogen to be.
Thanks screen oil prior did you want a biomarker.
So we are getting an excellent. Thanks, thanks, Chris.
Your next question comes from the line of solving Richter with Goldman Sachs.
Good morning, Thanks for taking my question.
Mentioned, a focus on expanding your early stage pipeline via BD and this is partly driven by.
The late stage pipeline here, where you have about 10 phase III trials ongoing could you just maybe speak to the confidence in the ladder, that's allowing you to kind of you.
You know maybe just work on the earlier basket here.
So I guess, there's two parts to the question of the confidence in the in the late stage pipeline certainly if I look at sales at the moment I think we feel that we've seen some pretty compelling data in the phase III.
Obviously, there's always a risk as you go into phase III, but.
We've got we've seen if you just take a M arm and we had the 80% resolution of EMR in patients on <unk>.
Again, we we.
We saw that actually even.
Two years after the last treatment of a patient that they were still seeing a benefit so.
That makes us believe that we have a disease modifying effect and I again, so all of those things unfurl I can add on.
On <unk>, obviously, we're doing pioneering work nobody has really ever reduce tau to the levels that we expect to be able to do so and we'll see what the results are those of.
Those trials of that trial is.
As I look at lupus.
You know again, we had very strong phase II results I think particularly in <unk>, where there is no drug get approved I think we have a <unk>.
Very strong belief.
The pier a loser mab has already proven itself in one phase III in so doing a second phase III would seem to be having a reasonably.
A reasonably high probability of success and I think again, even though necessarily allude to fill them up some areas that the company has been working on for quite a long time, So I think.
There's never a guarantee in research and development, but.
I think we have morphed the the pipeline from.
A lot of <unk>.
Moon shots, if you like to something where we've actually had a thoughtful progression and derisking of our pipeline and if.
If I look at the peak sales potential of that late stage pipeline in relation to our existing business.
Ladies and gentlemen, this is the conference operator, operator, we are experiencing an interruption in today's call.
Please standby I'm going to place music back on the conference do not disconnect. Your line. Thank you.
[music].
Yeah.
Yes.
[music].
And you are now reconnected with the audience you May proceed.
Great. Thanks, sorry, we got disconnected there Chris do you want us to respond to the last question. If you don't mind I'm not sure where we drop document it's interesting with all the hundreds of billions of dollars going into data centers and we still have for things like telephone calls.
Yes, just on the so again high conviction around the late stage early stage, we are building a lot of commercial capability now.
Preparing for the launch of that late stage.
Building up an awful lot of capability and understanding of immunology and now it makes sense to actually continue that build upon that in the early stage a.
A lot of companies get so focused on the launches and the late stage pipeline.
Research can sometimes be neglected, but this is now really the time to be investing in the next generation of products and I would argue there's never been a better time to be in immunology and I think biogen is ideally suited to it.
Thanks Christmas because there. The next question please from here.
Your next question comes from the line of Brian Abrams with RBC capital markets.
Hi, Good morning, Thanks for taking my question maybe.
Maybe a question for Alicia can you give us a sense on the early experience with what can be sub Q maintenance uptake and access with regards to non formulary exceptions, what the potential time lines might look like to get on formularies, both for maintenance and deduction and maybe whether we should be thinking about net price here ultimately landing at parity between the IV and the sub Q forms.
Alright. Thank you for the questions I think so far the feedback has been very positive from not only payers, but HCP and patient. We also anticipate that sub Q maintenance is going to enable patients to also stay on therapy longer. So we see it as a big upside.
It will take some time for providers and patients suggest with new outpatient treatment modality, even in maintenance capacity, but we do see this as a great bridge as we move into the potential of sub Q initiation. So we do expect the gradual uptake, but over time it will become a meaningful driver for long term therapy <unk>.
Treatment outcomes now now and into next year with the teams are doing this first or educating sites on what you referenced which is this non formulary redemption process. However, payers have told us that this should not pose challenges to hcp's. We're interested in transitioning their patients from IV and we are already aware of the first patients successfully.
Obligating this process with their physicians and we do know that we have several patients that are already on sub Q.
We also have a companion that has rolled out to the entire market. That's also help patients with how they do the auto injection, making sure they get their shipments and also making sure that physicians feel comfortable also through the non formulary exemption process. If you look at analogs in the market outside of Alzheimers disease, great rates.
Typically quite high so again, we don't think that will pose a challenge and then second is working through the Medicare part D.
Formulary for in the cycle for the goal of gaining access for patients across the nation. So we are now going through that process for Medicare and we believe that we will have access full access by 2027 in the meantime, though they do go through the non formulary exemption process, but.
At the end of the day, we are hearing that I click is really just an amazing option for patients and physicians in fact, just the other day I was speaking to a physician who would then has 10000 infusion.
Infusion of what can be and he said in some of his patients are very excited that they can go on vacation. They can take us with them and it's now giving them freedom to be able to travel even more than what they do today. So so far so good.
Moving into 2026, and we believe that initiation is going to even be a great accelerator for us as well.
Thanks, Felicia, let's go to the next question. Please.
Your next question comes from Paul Matisse with Stifel.
Hey, great. Thanks for taking my question.
There's been a lot of increasing interest in the prevention studies being run by Lilly and <unk> and east side and I just wanted to just ask a broader question how should we think about the commercial implications of these studies are positive. Obviously this could change the narrative significantly on the utility of a beta drugs, but what our team is struggling with is.
It's still a real challenge to actually treat the diagnosed population theres always capacity issues MRO, it's been a very very complicated sort of supply chain and so it feels to me like actually diagnosing patients and mobilizing providers to treat people, who are asymptomatic might create even more significant capacity issues and difficulties.
Again, the whole chain of hotspot.
So what would you say to that and how can you guys sort of prepare for a successful outcome here to actually generate a significant ROI. Thank you.
So I'll take that.
Thank you for the question I'll go ahead and take that one we've been thinking about this quite a bit obviously with top of mind of the potential of a successful trial reading out whether it is going to be a release trial or will be ACI biogen's trial.
And some of the things that we're looking at is especially in the PCP.
Area of how they improve the quality of their referrals into physicians now as I said blood based biomarkers are growing at a rapid pace also just recently Roche had a BB M that was approved called Alexis and this is really only a rule out.
<unk> is approved for a primary care setting, which basically helps them with this sort of asymptomatic or very early stage Alzheimers disease. So we believe through some of the efforts of the field on educating which by the way we're not the only one there are several organizations that are supporting these efforts to make sure that physician.
Understand that a lot of these pbms and meet the criteria for confirmation.
And what we're seeing is that during a pilot that we're running now which will read out. After the next quarter is can we actually improve the prescribing or the diagnosing and also then the referral and the quality of that referral I will say, though that we are seeing already in pet CSF that positivity rates of those tests have inquiry.
<unk> dramatically as well you know at the beginning of this journey, we were sitting at 50 50 positive versus negative and we are now north and upwards of that number and positivity, we believe that through the improvement of the triaging with a blood based biomarkers.
So I think thats one part of it the second part of it is of course some of these patients then won't landed Medicare depending on their age and so it's how do we also socialize and work with the commercial plans because they are the ones that would need to cover the product at that point and so clearly some of those conversations have already happened because we do have some younger popular population.
And patients that want to go on product and.
And so I do think we are thinking through that and by the time. These trials read out I do think that capacity will be also much better.
Yes, I think we can also say comparable resolution just said.
The subcutaneous form.
And that gets if that gets approved as we expect them for.
Initiation.
For maintenance.
Blood based diagnostic start to replace the pet scan and the lumbar puncture.
<unk> dramatically, reducing the workload at the neurology and as we've talked about in past meetings a lot of what we've been doing is trying to make them. The care pathway simpler for physicians with the idea of being able to increase throughput and is Alicia rightly pointed out I mean today about half of the patients who are.
Well together, an appointment with their neurologist or not actually eligible and again as we increase that yield really from from.
Referrals as Alicia pointed out that again route will significantly increase the capacity and we'd have to say that we still have quite a few neurologists that have not yet actually have initiated therapy on Alzheimer's. So there's this.
I think we'll still as it comes along I think we will find that the capacity will flex.
Thanks, Chris Let's go to the next question. Please.
Your next question comes from the line of Marc Goodman with Leerink partners.
Yeah, Hi, My question is about Scott Claris.
Just give us a little more color on what's happening behind the scenes I mean, you mentioned the 6 million impact in U S sales and you talked about O U S reimbursement issues, a little bit what's going on with volume growth maybe in the U S and interest overseas or are we seeing patient.
Patient growth.
Are we seeing good persistence like other configurations, just give us a sense of just what's happening.
We just got clearance a little bit more.
Thank you I'll go ahead and take that question I think first for I'll start with ex U S built.
Building on the successful launch in the U S. We continue unlocking new geographies for Sky Claris, which is now available as we said earlier in 34 countries and we are pleased to see the steady and continuous growth once the access is granted.
Mercies and with that it is a country by country basis, and they do continue to add pace.
Patients on a weekly basis, which we see updates about.
When you look at the U S. The U S is in a different situation because we did launch earlier and with that we have basically had very high penetration in our centers of excellence and we believe 90% of our remaining opportunity sits in the community and so we do have patient growth and.
And we do have volume growth when it comes to discontinuation. When we first launched we did notice that in the beginning our discussions though in line with Moxie were happening quite early on and we put a lot of tactics into place over this last year to address that with not only the field force, but the medical team and I will say.
Fast forward to today, our discount rates have actually declined. So we think we've improved our discontinuation with education with physicians about some of the side effects they see.
And also what patients can expect I think the second part of this which I think will probably impact.
The entire world with this launch is how patients after they've been on it for a year or year and a half because it slows the progression, it's very hard to be able to see like what is slowing progression look like and we have had a couple of instances where patients have discord. After about a year's time period, they've declined actually quite quickly and they've now come back onto <unk>.
Alex So we do know that at that time point, we will put more tactics into place and educating the actual patients and activating the patients.
Let's go to the next question please.
Your next question comes from the line of Andrew Tsai with Jefferies.
Hey, good morning, Thanks for taking my question, so going back to Alzheimer's you guys have a phase III dataset coming up in mid 2026. So I'm curious what you would want to see on CVR SB and the degree of Tau reduction as well and if that study is positive what would be your guys' base case in upside case expectation on the rack.
Literary pathway. Thank you.
Sure. So I think overall you know we believe that thousands really important pathological target an accumulation of tau is relevant and central to.
As I Ms disease with Big <unk>. The approach we've taken is really to address weather knocking down Tao all six ISO forms of Tau can result in target engagement. So we would need to see impact on biomarkers fluid Biomarkers imaging biomarkers.
And then C at least the trend on the clinical benefit that would be important for us to kind of think about the hypothesis.
We know that early stage research in E. D is always highly uncertain, but I think if this hypothesis has proven there's a huge opportunity now I think the other question. You had was how would we think about it in the portfolio perspective, I think once we have that it would be a step wise approach to thinking of.
If it is positive is there value to combination pattern, though sequential dosing and these are areas that we're thinking about really BP as we think about what would be the optimal approach and outcome for patients with early Alzheimer's.
Thanks for you, let's go to the next question. Please.
Your next question comes from the line of Terence Flynn with Morgan Stanley.
Hi, Thanks for taking the question maybe just a follow up for me on Tao I know J&J is progressing on anti Tau antibody in phase II and could have some data early next year you guys. Obviously explored this approach as well I think there are some differences maybe in terms of binding here, but when we see that J&J data assuming that come.
Before bib 80, how should we think about read through to your ASO program. Thank you for you.
Yeah, I think overall based on what I understand from the J&J program.
This is posted in the Mab and it's a tau monoclonal antibody it targets the mid domain of DAU. So it is different and in our experience.
We've had an experience in the field has had an experience of targeting tau with monoclonal antibody. Thus far that has not been promising and we believe that the main reason here is the extracellular tau that it targets and actually that is the hypothesis palsy is.
Is testing so you know, we'll wait to see they are in phase III and.
And I think what we saw from the phase one data was and in fact.
In some of the fluid Biomarkers. However, we didn't actually see any data on Tau pet, which we believe is very important. So we'll look for that data and in terms of read through.
I think as I said, it's early days for research in Alzheimer's disease with a 90000 agents. So we'll have to see what we see and then really try to annualize it but I think if it works it would be it would be helpful. Right. Because it would then address the point that is knocking down down actually.
Has an impact so I think it would be overall positive, but we wait to see the data first.
Let's go to the next one please cynthia.
Your next question comes from the line of David <unk> with Piper Sandler.
Hey, Thanks, So I have a question so just wanted to.
Get your thoughts on the fit of the product in the commercial portfolio given that it's primarily a women's health product that doesn't really synergize with your other business units I guess, how are you thinking about keeping the assets now that are more well resource well capitalized partner now controls the other 50.
Percent.
Okay.
Well I'm not sure how well capitalized I would.
Okay.
I think we are we still feel like.
First we are very happy with the partnership with <unk> I mean that is that is going extremely well.
And they have taken a different approach than stage, but I do think.
So this is still.
This is still a product where where biogen actually can can play a significant role there is a huge unmet need you having to shape the market.
And that is that is an area where commercially biogen is very strong.
From a resource point of view.
I'm not so sure that.
But even for <unk>. This is an easy fit because the prescriber base for <unk> typically is the psychiatrists, but here the main prescriber is actually the obgyn.
And so the resource level, I think compared to the actual sales and profit of the product still mean that this is an opportunity I am not sure. We are keen to get into other neuropsychiatry areas, but I think in terms of being able to create a market we shouldn't and her team are doing a terrific job.
It is a tricky one because again.
This is a one and done treatment and so you really have to build prescribers, who are prescribing multiple times, but the opportunity is significant there's only about 80000 women treated today and about 500000 mothers and this is just the U S alone are believed us.
Suffer from postpartum depression.
Think this this fits very much with the ethos of Biogen.
Alicia where do you want to add anything there.
Just to add to what Chris said I mean first of all we have really gotten off to a great start with the pernis and they've done a really nice job of trying to minimize the business impact anytime you have a handover and so we really are off to a very good start with them on.
On the surface it looks like there arent.
Energy is when it comes to the rest of the portfolio, but that's the only when you look at really the field force. If you look behind the scenes and you look at really our infrastructure of Biogen, which we're in a very fortunate situation and you look at things like our <unk> group, which is really our commercial operations group, we have a lot of synergy when it comes to data and analytics insights.
<unk> and especially we have a very strong omni channel presence and so what's been great about even putting.
Weil into until our portfolio is that we've been able to utilize a lot of the back office support to support this launch and we believe that's also part of the reason why the launch has been successful is because of all of the experience that we've had with our other products and also with our AI generation, we're doing some really interesting things for the <unk> launch as well so you know.
Stay tuned also on some more direct to consumer that we're planning for next year, which I think is really going to be a great accelerator preserves a thing maybe I can just add that we also have approvals in the EU and UK and you know it is a very important moment for mothers with PPD because it wasn't really recognizes in them to be and this.
Speaks to the quality of the data and the efforts and the high unmet need.
Okay, Let's go to our last question. Please.
Your next question comes from the line of Geoff Meacham with Citi.
Hey, guys. It's Ross on for Josh I guess the question was how was the how is the company thinking about capital allocation, especially considering bouncing BD and new launches, especially if there seems to be a heightened focus on developing and earlier stage pipeline.
Yes, Thanks, Jeff.
I mean first everything we're doing as I said earlier is to invest in long term sustainable growth.
We have been able to I think do a great job through previous judgment of building a very strong late stage development pipeline I mean, a lot of companies when you're putting a lot of things into phase III development start having too.
The increase the R&D spend and yet we are still actually spending less than what we did three years ago. So I think we've demonstrated capital efficiency on that.
We're being very thoughtful.
But also the indications. So you know we're not going into indications, where we have to go up against typically in a V or santa fee or people like that.
So the actual commercial investment is relatively modest compared to the opportunity and that's a again a space where biogen plays well.
We are recruiting people to bring in new capabilities in nephrology and transplant and in lupus, but thats actually a relatively small number.
<unk> of people.
And I think one of the best time to bring in assets is actually pre IMD.
You can do that on a cost effective basis, you can take advantage of the fact that a lot of companies have venture capital backed.
Financing that is designed to take that risk and you can actually build a portfolio easier.
Our early stage assets, either by collaboration or licensing and then you bring them in at the right point, where biogen can actually start to use it's more commercially oriented skills and development skills to shape those products. So I think from a capital allocation point of view I think we.
We can manage all of this and I think we still have room and you know we're not abandoning looking at later stage assets.
But the later this stage obviously the more expensive and you have to be extremely disciplined on uninsured or whatever you buy is going to generate a return on investment.
I think.
I think we are in a good spot today and.
We've got the capital we need to do the business, but of course, we are.
We're continually monitoring that with them.
And making sure that.
Everything we do is driving shareholder value.
Okay.
Thanks, Chris So that's it for today I know, it's a very busy morning for everybody. When you got more questions. The IR team is here to answer those for you. Thank you.
This concludes today's call. Thank you for your participation you may now disconnect.
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