Release Date: August 01, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Biogen Inc (BIIB, Financial) reported strong quarterly results, reflecting the hard work of the team over the past 18 months to transform the company.
- New product launches are either in line or ahead of expectations, with particularly strong results for Alzheimer's treatment Leqembi in the US, Japan, and promising early data from China.
- The company has successfully reduced its cost base, leading to a significant improvement in margins.
- Biogen Inc (BIIB) has invested heavily in growth opportunities, both in new product launches and key R&D assets.
- The acquisition of Reata and High Bio is expected to drive significant shareholder value and contribute to long-term growth.
Negative Points
- The MS portfolio continues to face challenges due to increased competition from biosimilars and generics.
- There have been setbacks along the way, including a negative opinion from the CHMP on Leqembi in Europe.
- The company faces potential revenue declines in the MS business and the possibility of a biosimilar entrant for Tysabri in the US.
- Biogen Inc (BIIB) has discontinued three mid-stage programs based on readouts, indicating challenges in pipeline development.
- The company needs to continue ramping up launch spending for new products, which may impact short-term profitability.
Q & A Highlights
Q: Can you speak to your confidence around 2023 being the trough year for earnings and what needs to play out from here for clean growth through the end of the decade?
A: (Michael R. McDonnell, Executive VP & CFO) Our mission at Biogen remains to bring ourselves to sustainable growth on both the top line and bottom line. Our original guidance, which implied growth of 5% on the bottom line at the midpoint, now shows 9% at the midpoint, indicating we've turned the corner on the bottom line. We're very focused on our cost savings program, which improves our operating performance and frees up capital for growth initiatives. While we don't guide beyond 2024, we're pleased with the progress of our launches and the stabilization of our top line. We're hopeful that 2023 was the trough year, and we'll have more to say early next year.
Q: Do you plan to submit additional evidence on efficacy or safety from trials or from real-world evidence to reverse the EMA decision on lecanemab?
A: (Priya Singhal, Executive VP, Head of Development & Interim Chief Medical Officer) We are very disappointed with the negative opinion for lecanemab. We believe the benefit-risk is positive and favorable, as evidenced by approvals in major regions like the U.S., China, and Japan. We will be applying for a reexamination process, working with a newly appointed rapporteur and co-rapporteur. We believe the issues driving the decision are addressable with the data we've generated, including long-term data and extensive real-world evidence. The reexamination process generally moves faster than the original application.
Q: Can you walk me through some of the rationale on opting out of the Angelman syndrome program with Ionis?
A: (Priya Singhal, Executive VP, Head of Development & Interim Chief Medical Officer) We have a disciplined approach to reviewing our pipeline, focusing on programs with the highest probability of success. For the Angelman syndrome program, we developed go/no-go criteria based on biomarkers, established regulatory pathways, clinical tractability, and confidence in regulatory endpoints. Based on these criteria, we decided to pivot to other programs. Additionally, we consider the ability to launch products globally and the level of evidence acceptable to payers and regulators around the world.
Q: Are there any updates on the subcutaneous induction dose optimization work for lecanemab?
A: (Priya Singhal, Executive VP, Head of Development & Interim Chief Medical Officer) We have already filed for the IV maintenance and have a fast track and rolling submission in place for the subcutaneous maintenance dosing. We are working with the FDA on optimizing the dose and are on track to have an outcome by Q1 2026. The application in Europe for reexamination is based on the original IV application, and we hope to provide options to patients with the subcutaneous formulation if we get a favorable outcome.
Q: Could you speak to the interactions and feedback that reps are having in the field regarding lecanemab?
A: (Alisha A. Alaimo, President & Head of North America) The physicians who are currently prescribing lecanemab understand the data and have been visited by MSLs and representatives. We are seeing positive real-world experience feedback from physicians on the impact on patients and caregivers. We are not hearing any pushback about cost-benefit. The number of physicians prescribing lecanemab has increased, and the depth of ordering from IDNs is encouraging. We believe the market will continue to grow as more evidence is generated.
Q: What are you seeing on patient persistence or potential discontinuation rates for Skyclarys?
A: (Alisha A. Alaimo, President & Head of North America) We are pleased with the adherence and compliance rates for Skyclarys. Discontinuation rates are consistent with clinical trials. Physicians are good at setting expectations with patients and encouraging them to stay on the product for at least a year. We are also leveraging our AI engine to identify additional coded FA patients, which is promising for patient identification and engagement.
Q: What's Biogen's appetite for bigger transactions or Riata-like deals in the near to midterm?
A: (Christopher A. Viehbacher, President, CEO & Director) We are looking outside of neuroscience, focusing on immunology and rare diseases. We have the capability to launch products globally and are interested in assets that fit our strategic priorities. We are not desperate to do a deal and will avoid overpaying. We are also interested in early-stage assets to create more shareholder value. We will continue to look for opportunities that align with our strengths and capabilities.
Q: Can you speak to your expectations for the upcoming lupus data and what needs to happen to move forward?
A: (Priya Singhal, Executive VP, Head of Development & Interim Chief Medical Officer) We are excited about the upcoming readout for dapirolizumab pegol (Dapi). The study is investigating the safety and efficacy of Dapi as an add-on to standard SLE therapy. We will be looking for a meaningful change on the primary endpoint and key secondaries, such as severe flare prevention. If the results are favorable, we expect to run another Phase 3 study. We believe this could be meaningful for patients suffering from SLE.
Q: What are the challenges that Biogen still faces, and what are the next steps for the company?
A: (Christopher A. Viehbacher, President, CEO & Director) We still face challenges in our MS franchise, including potential biosimilars and patent litigation. However, we have an amazing talent base and are focused on transforming passive capital into active capital. We are now focused on building out our R&D portfolio, both internally and externally, to ensure sustainable growth. We will continue to deploy capital with discipline and invest in innovation to drive future growth.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
