The conference call for Biogen's fourth quarter and full-year 2023 earnings and business update is about to begin. The operator introduces the call and reminds participants that it is being recorded. The Head of Investor Relations, Chuck Triano, then provides some information about where to find the financial tables and the use of non-GAAP financial measures. He also mentions the forward-looking statements and the potential risks involved. The President and CEO, Chris Viehbacher, the Head of Development, Dr. Priya Singhal, and the CFO, Mike McDonnell, will each make some opening comments before moving on to the Q&A session.

The speaker, Chris Viehbacher, is pleased to announce that Biogen is expecting positive earnings growth and is focused on becoming a growth company. They have made significant progress in repositioning the company for growth, including refocusing on new product launches and embracing new therapeutic categories and businesses. This required a cultural change as the multiple sclerosis franchise, which has been the company's main focus, is facing increased competition.

Biogen has shifted its resources and focus towards LEQEMBI, ZURZUVAE, SKYCLARYS, and QALSODY, but still faces competition for its patented products. Despite forecasts of decline, Biogen's team has successfully brought SPINRAZA to modest growth. The company's focus on efficacy rather than mode of administration has helped it maintain its position as a leader in the market. Biogen has also taken steps to reengineer its business and reduce its high cost base, achieving $200 million in savings through a fit-for-growth reengineering project. The company is also making changes to its research and development strategy.

The CEO of Biogen discusses the company's focus on finding solutions for devastating diseases and the risks and expenses involved in pioneering new treatments. He highlights the importance of a disciplined and objective approach to the pipeline and the need for sustained growth and investment. He also mentions the company's current product, LEQEMBI, and the importance of identifying the right patients for effective treatment.

The pharmaceutical industry has invested in drugs for Alzheimer's disease in the past, but they have not been successful due to difficulty in getting the drugs to the brain and targeting the right patients. The Clarity study showed the importance of reducing plaque for improving cognition, and there is ongoing research on treating patients in the early stages of the disease. There are currently approximately 2,000 patients on therapy, with an increase in patients in January compared to December. There is a demand for the product, as seen in patient registries.

The article discusses the progress of IDNs in implementing care pathways and treatment protocols for LEQEMBI, with 70 out of the top 100 IDNs having positive P&T committee decisions and 80% of those ordering the drug. The article also mentions increased activity and volume in PET scans, MRIs, and blood diagnostics. The go-to-market model has been validated and the company plans to increase promotion and expand the field force. The launch in Japan and approval in China are also mentioned. The launch of SKYCLARYS in the US has around 1,000 patients on therapy, with a potential population of 4,500 once a pediatric indication is obtained.

Biogen has successfully launched a therapy for rare diseases, with over 20% of patients receiving treatment within six months. Their strength lies in their ability to navigate complex logistics and provide support for patients and physicians. They have a global filing strategy in place to ensure all patients with Friedreich's Ataxia can benefit from their therapy. They are also actively working on obtaining an indication for children under 16. Additionally, Biogen is addressing the unmet need for postpartum depression treatment and is focused on reaching out to the estimated half a million women who suffer from this condition every year.

The speaker is optimistic about the initial data from the product launch and is grateful for the support from payers. They have focused on prioritizing their development pipeline and have discontinued some programs while investing in others, such as their industry-leading pipeline for Alzheimer's disease. They plan to continue investing in this area, starting with their product LEQEMBI.

The company's main priorities are to make LEQEMBI available globally for early Alzheimer's patients and to develop additional treatment options. They are working with Eisai to submit filings for maintenance dosing, evaluate administration in preclinical AD, and develop a subcutaneous version. They are also advancing pipeline programs targeting tau, including an ASO and a small molecule, and exploring other potential targets for Alzheimer's treatment.

Biogen is looking to expand their rare disease portfolio and sees rare disease expertise as a core competency. They are currently working on a potential treatment for Angelman's syndrome, a rare genetic neurodevelopmental disorder. The disorder is characterized by severe developmental delays and individuals with it require continuous care. BIIB121 aims to restore expression of the UBE3A gene, and the HALOS 1 study is currently assessing its safety and potential as a treatment. Early interim results have been encouraging.

The long-term extension study for the drug showed positive results in terms of safety and tolerability, with early trends suggesting a reduction in slow delta wave activity and improvement in overall functioning. Biogen will make a decision on whether to conduct a pivotal study after reviewing the full results expected midyear. In the lupus area, Biogen has two Phase 3 assets, with a topline readout expected midyear for one and two ongoing Phase 3 studies for the other. Litifilimab also has potential in treating Cutaneous Lupus Erythematosus. Biogen has completed a review of their pipeline and will continue to prioritize areas where they have expertise and confidence in delivering meaningful treatments for patients.

In the fourth quarter of 2023, Biogen reported a decrease in total revenue of 6% at actual currency and 5% at constant currency. They also announced a non-GAAP diluted earnings per share of $2.95, which includes a negative impact of $0.35 from closeout costs related to ADUHELM. For the full year of 2023, total revenue declined by 3% at actual currency and 1% at constant currency, while non-GAAP diluted EPS was $14.72. The decline in revenue was mainly attributed to competition and generic TECFIDERA. Biogen also provided updates on their MS business during the quarter.

The paragraph discusses updates on Biogen's products TECFIDERA, TYSABRI, VUMERITY, SPINRAZA, SKYCLARYS, and QALSODY. The European Commission revoked the marketing authorization for generic versions of TECFIDERA, affirming Biogen's marketing protection until 2025. A TYSABRI biosimilar has been launched in some European countries, and Biogen will continue to enforce its patents. VUMERITY has seen modest growth but is facing pricing pressure and market contraction. SPINRAZA revenue increased in the fourth quarter, but was impacted by shipment timing and competition. SKYCLARYS has shown patient growth since becoming a Biogen product.

In the fourth quarter, the company's biosimilars revenue increased by 8% at actual currency and 10% at constant currency. The company is exploring strategic alternatives for this business to maximize its value for shareholders. The anti-CD20 revenue included an operating loss of $12 million related to LUNSUMIO. Contract manufacturing, royalty, and other revenue were lower due to timing of batches. The company's non-GAAP cost of sales was 25% of total revenue and included $52 million in idle capacity charges. Non-GAAP R&D expense decreased by $34 million, while non-GAAP SG&A expense decreased by $44 million due to cost savings initiatives. The company ended the year with $1 billion in cash and $6.9 billion in debt, putting them in a net debt position of $5.9 billion. In the fourth quarter, they used $1.3 billion in cash for final acquisition payments and paid down $350 million of a term loan. $393 million of the $1.3 billion was a one-time payment related to equity-based compensation for the Reata transaction.

The company expects to generate strong cash flow in 2023, with a potential $437 million payment from Samsung. For 2024, they anticipate a 5% growth in non-GAAP diluted earnings per share and a decline in total revenue. However, core pharmaceutical revenue is expected to remain relatively flat due to new product launches offsetting declines in MS product revenue. The first quarter is expected to be weaker due to seasonal factors. Contract manufacturing revenue will also decrease due to completing certain commitments in 2023. This is expected to have a positive impact on cost of sales and operating income and margins are expected to grow at a low-double-digit and mid-single-digit percentage, respectively, compared to 2023.

The company expects to see improved financial performance in 2024 due to cost savings and lower operating expenses from their Fit for Growth initiative. They have already achieved $200 million in savings and plan to reach $400 million by the end of the year. They also expect their R&D and SG&A spend to total $4.3 billion in 2024. They anticipate a return to non-GAAP EPS growth and remain committed to creating long-term value for shareholders. There are several milestones to look out for this year, including a scientific advisory group for LEQEMBI and potential approval by the European Commission.

The company SKYCLARYS has achieved approval for QALSODY in the European Union and is expecting a decision from the CHMP and European Commission in the first half of the year. They also have regulatory submissions coming up for the subcutaneous formulation of LEQEMBI and IV maintenance dosing for LEQEMBI. There are four data readouts expected mid-year for four programs, and the company is focusing on building out their pipeline. An analyst asked about the impact of subcu and maintenance approvals on the market and the expected uptake in Japan. The company expects to achieve bioequivalence with the IV formulation and plans to file for the subcutaneous formulation by the end of March 2024.

The company plans to file data on the potential and need for IV maintenance by Q1 2024. The main benefit of the subcutaneous formulation is convenience for patients. The company expects time on drug to expand with the AHEAD study and maintenance therapy. The safety profile of LEQEMBI is significantly better than that of donanemab. The stopping criteria for donanemab are not clear and may involve onerous requirements such as PET scans. The company believes it will have several factors to compete with donanemab, including the subcutaneous formulation, but donanemab may be on the market before the subcutaneous formulation is approved.

Chris Viehbacher discusses the commercial strategy for LEQEMBI and mentions the positive reception in Japan. He also addresses the potential bottlenecks for the launch, including Medicare Advantage coverage and patient access to neurologists. He will look into the differences between Medicare and Medicare Advantage.

The speaker discusses the bottlenecks that are present in getting patients onto treatment for a certain condition, and mentions that there are twice as many people on the registry as there are on treatment. They also mention a challenge in scheduling the first MRI, which is necessary before initiating treatment. The speaker then moves on to address a question about a Phase 3 trial for a different condition, mentioning that the trial size was reduced and the primary endpoint has three components, but the FDA prefers a single clear index.

The speaker discusses the expected results and timeline for the Phase 3 trial of dapi. They mention a protocol amendment made in collaboration with Biogen and UCB to potentially expedite the delivery of dapi to patients in need. They believe the study is appropriately powered and will provide a clear readout on the potential of the drug. The speaker then answers a question about the decision to add more resources from both Biogen and Eisai to the LEQEMBI launch in the US, citing the complexity of the launch and the need to understand the go-to-market model.

The coordination involved in the launch of LEQEMBI is complex and requires working with various offices and understanding reimbursement and care pathways. The decision to have one company lead the launch was made to simplify the process and ensure that the role of the NAS is understood. After six months of the launch, the company feels confident in the model and is now focused on expanding to more sites. This may involve geographic expansion and potentially reducing the territory size for NASs to be more efficient in their visits with specialists.

The CEOs of Biogen and Eisai had an agreement that Biogen would join the joint venture once it was scaled up. However, they decided it would be more efficient to have only one company on the field at the start. They have since learned from this experience and are now confident in putting both companies out into the field immediately, as they will be working together for many years. When it comes to lecanemab subcutaneous treatment in treatment-naive patients, the companies have discussed this with the FDA and have aligned on the design of a Phase III study, with a subset of 72 patients providing data on PK/PD and bioequivalence, and a larger group of 322 patients providing safety data.

The launch of SKYCLARYS in Europe has been approved, with Germany being the first country to have a formal launch. There are also early access programs in place in France and negotiations for programs in other European countries and some countries outside of the EU. The timing of the launch in these countries is uncertain due to the need for pricing and reimbursement, but it is not expected to be as fast as the launch in the United States.

The company expects slower uptake of their drug in Europe due to longer reimbursement times and limited early access programs. However, there is a higher incidence of the disease in Europe compared to the US. They are also expediting regulatory filings in Latin America, where they estimate there are 2,000 to 4,000 patients. They do not plan to launch in Asia due to the low number of patients. The company expects substantial revenue from Latin America, similar to their experience with another drug. They anticipate a trajectory of 800 to 1,000 patients for their drug SKYCLARYS in 2024, with a total of 4,000 patients estimated to have the disease. It is unclear how many of these patients have been identified and the growth rate may moderate in the future.

Chris Viehbacher, CEO of Reata Pharmaceuticals, discusses the complexities of the company's growth in 2024. He mentions that the approval of their product was delayed due to a manufacturing issue, resulting in a "warehousing effect" where patients and physicians were waiting for product availability. The company is now working with patient associations to identify patients and make genetic testing more readily available. While the growth may not be as high as last year, SKYCLARYS is still contributing significantly to their return to growth in 2024. In response to a question, Viehbacher clarifies that the filing for their subcutaneous product will be in the first half of 2024.

The company aims to file for the subcutaneous treatment by the end of the first quarter of 2024. The AHEAD 3-45 trial is a platform trial with different amyloid levels for preclinical Alzheimer's disease. The A45 trial has an enrollment target of 1,000 patients with an amyloid level of 40 centiloids or more, while the A3 trial has a target enrollment of 400 patients with an amyloid level between 20 and 40 centiloids. The primary endpoint for the A3 trial is a biomarker endpoint, and there is a possibility of an interim analysis, although a timeline has not been communicated yet. The company is pleased with the enrollment progress for both trials.

The speaker clarifies that the confusion regarding the expected mid-year date for the FDA meeting is due to the dots being at the end of the quarter. They mention that Eisai has scheduled another meeting and they are encouraged by the 6-month data they have seen. The speaker then addresses a question about the Angelman program and explains that it is being led by their partner, Ionis. They have the option to participate in the development and will make a decision based on the data they receive mid-year.

The Phase Ib trial for BIIB121 is set up to last three months, with a multiple ascending dose component followed by a long-term extension. The trial will include different age groups and doses, and will look at EEG trends as well as clinical endpoints. The company believes that their ASO backbone is different from competitors and that their 3-month dosing schedule may have a competitive advantage. They also mention that Roche has discontinued their program, but BIIB121 is a different product and may have a competitive advantage. Ultimately, the company will need to see the data before making any conclusions.

Chris Viehbacher, CEO of a pharmaceutical company, responds to a question about the company's plans for regaining growth with their product SPINRAZA. He explains that they have an oral therapy, a gene therapy, and an intrathecal therapy, and they are focusing on targeting more adult patients and developing a high-dose program. The company also expects some lumpiness in shipments outside of the U.S.

The company saw modest growth in the U.S. and a decline in international markets in 2023, but overall they are pleased with the stabilization of their franchise. The CEO discusses the impact of new competitors on market share and how focusing on efficacy and patient populations can help maintain leadership. They are confident in the launch of PPD and plan to share metrics in the future. The company has a general interest in the psychiatry space.

The company's initial target for prescribing their product has been high-prescribing psychiatrists and OB-GYNs. They were unsure if the OB-GYNs would be willing to prescribe, but they have seen a high percentage of prescriptions coming from them. Reimbursement from payers has been a key statistic, and they are interested in knowing how many patients are treatment-naive versus those who have been on treatment. They are also curious if there is a warehousing effect, with a bolus of patients coming in due to media coverage and the product's delayed launch. The company will provide an update on the data and trends in Q1. So far, they are doing better than expected.

This summary was generated with AI and may contain some inaccuracies.