Q2 2024 Earnings Summary
- Biogen is transforming passive capital into active growth, notably through the acquisition of HI-Bio, which is expected to drive shareholder value and enhance the R&D portfolio. ,
- New product launches are performing ahead of expectations, with LEQEMBI showing strong results not only in the U.S. but also in Japan and China, indicating a promising future for the company's Alzheimer's franchise. ,
- Cost reduction initiatives are exceeding goals, leading to improved margins and significant EPS growth, positioning the company for sustainable growth from 2025 to 2030. ,
- Biogen faces significant competitive threats to its Multiple Sclerosis (MS) franchise, including potential biosimilars for TYSABRI and an important patent litigation for TECFIDERA in Europe, with market exclusivity expiring in February, which could negatively impact revenues.
- LEQEMBI received a negative opinion from the EMA, casting doubt on its approval in the EU and potentially limiting its global market potential.
- Concerns among neurologists and Alzheimer's specialists about LEQEMBI's risk-benefit and cost-benefit ratios, and questioning of the amyloid hypothesis, may hinder wider adoption of the drug.
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Earnings Growth Outlook
Q: Is 2023 the earnings trough; what ensures growth ahead?
A: Michael McDonnell affirmed that Biogen aims for sustainable top and bottom-line growth. The company is pleased with the 2024 guidance, raising non-GAAP EPS growth to 9% at the midpoint ( ). He highlighted the stabilizing top line and the focus on cost savings programs that improve operating performance and free up capital for growth initiatives ( ). Biogen is confident that 2023 was the trough year and is focused on new product launches and the durability of the MS franchise to drive growth ( ). -
LEQEMBI EMA Decision
Q: Will you appeal the EMA's negative opinion on LEQEMBI?
A: Priya Singhal expressed disappointment with the EMA's negative opinion on LEQEMBI but affirmed plans to request a reexamination ( ). She emphasized that they believe in LEQEMBI's favorable benefit-risk profile, which has been approved in major regions like the United States, China, and Japan ( ). The reexamination process involves submitting additional data, including long-term and real-world evidence, to address the EMA's concerns, aiming for a potentially faster outcome than the original application ( ). -
Business Development Strategy
Q: What's your appetite for large acquisitions like Reata?
A: CEO Chris Viehbacher stated that Biogen is open to acquisitions similar to Reata but is disciplined and not desperate to do deals ( ). The focus is on areas where Biogen has strong capabilities, such as immunology and rare diseases, avoiding competitive auctions to prevent overpaying ( ). He highlighted that Biogen's size allows it to consider assets that may be too small for larger companies but significant for Biogen, aiming to create shareholder value through smart capital deployment ( ). -
LEQEMBI Subcutaneous Dosing
Q: Any updates on LEQEMBI subcutaneous dosing option?
A: Priya Singhal reported that they continue to work on the subcutaneous formulation of LEQEMBI, with a rolling submission in place and a goal to potentially accelerate proof-of-concept outcomes ( ). They are collaborating with the FDA, aiming for an outcome by Q1 2026 ( ). Regarding the EMA application, the subcutaneous option may not directly impact the current reexamination process, which focuses on intravenous LEQEMBI ( ). -
Physician Feedback on LEQEMBI
Q: Are physicians showing less favorable views on LEQEMBI?
A: Alisha Alaimo stated that they are not experiencing pushback from physicians regarding LEQEMBI's risk-benefit or cost-benefit ratios ( ). She emphasized that physicians prescribing LEQEMBI understand the data and are actively working to get patients treated, indicating strong conviction in the therapy's importance ( ). CEO Chris Viehbacher added that the increasing number of prescribing physicians and depth of ordering suggest growing confidence and commitment to LEQEMBI ( ). -
Lupus Portfolio Expectations
Q: What are your expectations for upcoming lupus data?
A: Priya Singhal expressed excitement about the upcoming readout for dapirolizumab (DAP) in systemic lupus erythematosus (SLE) ( ). The Phase III trial investigates safety and efficacy over 48 weeks, aiming for meaningful changes on primary endpoints and acceptable safety profiles ( ). If results are positive, they expect to run another Phase III study, with planning already underway ( ). -
SKYCLARYS Patient Persistence
Q: How is patient persistence with SKYCLARYS?
A: Alisha Alaimo reported that discontinuation rates for SKYCLARYS are consistent with clinical trials, and patients tend to stay on therapy ( ). Physicians set appropriate expectations, advising patients to stay on treatment for at least a year ( ). They are past the catch-up population and are now in the patient identification phase, using AI tools to identify additional patients, which is promising for growth ( ). -
Company Challenges Ahead
Q: What challenges remain for Biogen?
A: CEO Chris Viehbacher acknowledged ongoing challenges, including potential biosimilar competition for TYSABRI and important patent litigation for TECFIDERA in Europe ( ). He emphasized the company's strong scientific and medical capabilities, focusing on smart capital deployment, and transforming passive capital into active growth opportunities ( ). Biogen aims to build its R&D portfolio internally and externally to drive future growth ( ). -
Angelman Syndrome Program
Q: Why did you opt out of the Angelman program with Ionis?
A: Priya Singhal explained that Biogen employs disciplined decision-making based on data readouts and predefined go/no-go criteria ( ). After evaluating the BIIB121 data, they decided not to continue investment due to the assessment of the probability of technical and regulatory success ( ). The focus remains on programs with compelling data and established regulatory pathways ( ).