Biogen Inc. (BIIB) 2024 Q2 Earnings Call Summary

Optimistic Highlights

• Strong Quarterly Results

  Biogen announced strong quarterly results, reflecting 18 months of transformative efforts, including successful new product launches and cost reduction initiatives.

• Successful Product Launches

  New product launches, including LEQEMBI, are either in line or ahead of expectations, with LEQEMBI seeing strong results in the US, Japan, and promising early data from China.

• Cost Reduction and Margin Improvement

  Biogen is on track with its cost reduction plan, leading to significant operating expense reduction and margin improvement.

• SPINRAZA and VUMERITY Performance

  Despite competition, SPINRAZA has held its own, and VUMERITY is growing at double digits in the US, highlighting the strength of Biogen's existing portfolio.

• Positive Outlook from Reata Acquisition

  The acquisition of Reata is paying dividends, with strong launches in the US and Europe for ZURZUVAE, addressing a huge unmet need.

Pessimistic Highlights

• MS Portfolio Decline

  The multiple sclerosis (MS) portfolio is facing decline due to increased competition from biosimilars and generics.

• Challenges Ahead

  While Biogen has made significant progress, the company acknowledges ongoing challenges and the need for continued development of a sustainable growth platform.

Company Outlook

• Focus on Alzheimer's and Lupus Portfolios

  Biogen aims to continue investing in its Alzheimer's portfolio, with LEQEMBI and other modalities like tau, and is excited about the emerging lupus portfolio, including upcoming readouts for dapirolizumab.

• Expansion into Immunology

  The acquisition of HI-Bio and the development of felzartamab highlight Biogen's strategy to balance its portfolio by expanding into immunology, aiming for a differentiated and potentially best-in-class treatment option across multiple serious immunologic diseases.

• Continued Investment in Growth

  Biogen plans to continue investing in growth opportunities, both internally and through disciplined external acquisitions, focusing on the 2025 to 2030 timeframe.

Q & A Highlights

• Q: Can you speak to your confidence around 2023 being the trough year for earnings? (Salveen Richter, Goldman Sachs)

  A: Biogen aims for sustainable growth on both the top and bottom lines, with 2024 showing growth in non-GAAP EPS and efforts to stabilize the top line. The company is hopeful that 2023 was the trough year, with a focus on the performance of new product launches and the MS franchise. (Mike McDonnell)

• Q: Do you plan to submit additional evidence to reverse the EMA's negative opinion on LEQEMBI? (Unidentified Analyst, Wells Fargo)

  A: Biogen, along with Eisai, plans to request a re-examination of the EU filing for LEQEMBI, believing the issues are addressable with additional data and real-world evidence already generated. (Priya Singhal)

• Q: Can you walk me through some of the rationale on opting out of the Angelman Syndrome Program with Ionis? (Evan Seigerman, BMO Capital Markets)

  A: Biogen applies a disciplined approach to evaluating programs based on biomarkers, established regulatory pathways, and confidence in regulatory endpoints. The decision on the Angelman Syndrome Program was based on this disciplined approach. (Priya Singhal)

• Q: Any updates on the subcu induction dose optimization work for LEQEMBI? (Michael DiFiore, Evercore ISI)

  A: Biogen is working on optimizing the subcutaneous induction dose for LEQEMBI, with an outcome expected from the FDA by Q1 2026. The focus is on the intravenous application in Europe, with plans to provide subcutaneous formulation options globally. (Priya Singhal)

• Q: What are you seeing on patient persistence or potential discontinuation rates for SKYCLARYS? (Unidentified Analyst, RBC Capital Markets)

  A: Discontinuation rates for SKYCLARYS are not outside of clinical trial expectations, with physicians setting clear expectations for patients regarding efficacy. Biogen is identifying additional coded FA patients through an AI engine, enhancing patient reach. (Alisha Alaimo)

• Q: What's Biogen's appetite for bigger transactions or Reata-like transactions going forward? (Paul Matteis, Stifel)

  A: Biogen is open to acquisitions like Reata but emphasizes discipline in deploying capital. The focus is on immunology, rare diseases, and areas where Biogen can be a strong player without entering competitive auction processes. (Chris Viehbacher)

• Q: Can you speak to expectations for upcoming lupus data? (Michael Yee, Jefferies)

  A: Biogen is excited about the upcoming readout for dapirolizumab in SLE, focusing on meaningful change in the primary endpoint and key secondaries. Results will guide the need for another Phase 3 study. (Priya Singhal)

• Q: What challenges are top-of-mind for Biogen, and what's the outlook? (Eric Schmidt, Cantor Fitzgerald)

  A: Biogen faces challenges with its MS franchise and ongoing patent litigations. The focus is on transforming passive capital into active growth opportunities and investing in R&D for the 2025 to 2030 timeframe. (Chris Viehbacher)