On October 22, 2019 Biogen Inc. (Nasdaq: BIIB) reported third quarter 2019 financial results (Press release, Biogen, OCT 22, 2019, View Source [SID1234542401]).
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"Biogen delivered solid performance in the third quarter driven by continued resilience from our MS core business and growth from SPINRAZA and biosimilars," said Michel Vounatsos, Biogen’s Chief Executive Officer. "SPINRAZA continued on a strong trajectory, particularly outside the U.S., and we are preparing for the expected launch of VUMERITY, which we believe will be an important addition to our market-leading multiple sclerosis portfolio. In addition to the recent news on aducanumab, we made strong progress in our pipeline as we initiated new clinical programs targeting Parkinson’s disease and brain contusion, and we look forward to nine important data readouts by the end of next year. We continue to believe that our core focus on neuroscience will lead to new innovative treatments for patients and will maximize long-term returns for our shareholders."
Financial Results
Third quarter total revenues were $3,600 million, a 5% increase versus the third quarter of 2018.
Multiple sclerosis (MS) revenues, including $188 million in royalties on the sales of OCREVUS, increased 2% versus the prior year to $2,348 million.
Revenue growth was driven in part by the continued global launch of SPINRAZA, which contributed $547 million in revenues in the third quarter of 2019 compared to $468 million in the third quarter of 2018.
Revenue growth was also driven by biosimilars revenues, which increased to $184 million compared to $135 million in the third quarter of 2018, primarily driven by IMRALDI.
Third quarter GAAP net income and diluted earnings per share (EPS) attributable to Biogen Inc. were $1,546 million and $8.39, respectively, compared to $1,444 million and $7.15, respectively, in the third quarter of 2018.
Third quarter Non-GAAP net income and diluted EPS attributable to Biogen Inc. were $1,689 million and $9.17, respectively, compared to $1,494 million and $7.40, respectively, in the third quarter of 2018.
In the third quarter of 2019 channel inventory levels in the U.S. decreased by approximately $30 million for TECFIDERA, AVONEX, PLEGRIDY, and TYSABRI combined. This compares to a decrease in inventory levels of approximately $30 million in the second quarter of 2019 and a decrease of approximately $5 million in the third quarter of 2018.
In the third quarter of 2019 SPINRAZA revenues comprised $237 million in sales in the U.S. and $310 million in sales outside the U.S. The number of commercial patients receiving SPINRAZA grew approximately 3% in the U.S. and approximately 18% outside the U.S. versus the second quarter of 2019.
R&D expense in the third quarter of 2019 included approximately $58 million in net closeout costs for the Phase 3 studies of elenbecestat in early Alzheimer’s disease (AD) and the Phase 2b study of BG00011 in idiopathic pulmonary fibrosis (IPF).
Other Financial Highlights
In the third quarter of 2019 Biogen recognized a GAAP-only impairment charge of approximately $216 million and a GAAP-only gain of $61 million on fair value remeasurement of contingent consideration, both related to the discontinuation of BG00011.
For the third quarter of 2019 GAAP other expense was $27 million. Non-GAAP other expense for the third quarter of 2019 was $23 million.
For the third quarter of 2019 the Company’s effective GAAP tax rate was approximately 12%, compared to approximately 20% in the third quarter of 2018. For the third quarter of 2019 the Company’s effective Non-GAAP tax rate was approximately 16%, compared to approximately 21% in the third quarter of 2018.
Compared to the third quarter of 2018, the Company’s GAAP effective tax rate for the third quarter of 2019 benefited from the remaining benefit realized from U.S. corporate tax reform, a change in our tax profile in the second quarter of 2019, and recently enacted tax reform in Switzerland.
In the third quarter of 2019 Biogen repurchased approximately 3.1 million shares of the Company’s common stock for a total value of approximately $718 million.
As of September 30, 2019, there was approximately $3,372 million remaining under the share repurchase program authorized in March 2019.
As of September 30, 2019, Biogen had cash, cash equivalents, and marketable securities totaling approximately $6,251 million, and approximately $5,954 million in notes payable.
In the third quarter of 2019 the Company generated $1,695 million in net cash flows from operations.
For the third quarter of 2019 the Company’s weighted average diluted shares were 184 million.
Recent Events
This week Biogen is presenting new data from the Company’s anti-TNF biosimilar portfolio, which includes FLIXABI (infliximab) and IMRALDI (adalimumab), highlighting real-world evidence confirming the safety and efficacy of anti-TNF biosimilars for patients with inflammatory bowel disease. These data are being presented at the United European Gastroenterology (UEG) Week 2019.
In October 2019 the U.S. Food and Drug Administration (FDA) issued a tentative approval for VUMERITYTM (diroximel fumarate), a novel oral fumarate with a distinct chemical structure, for the treatment of relapsing forms of MS. Additionally, in July 2019 Biogen and Alkermes plc announced positive topline results from EVOLVE-MS-2, a large, randomized, double-blind, five-week, Phase 3 study of VUMERITY for relapsing-remitting MS, compared to TECFIDERA (dimethyl fumarate). VUMERITY was statistically superior to TECFIDERA on the study’s pre-specified primary endpoint, with patients treated with VUMERITY self-reporting significantly fewer days of key gastrointestinal symptoms with intensity scores ≥ 2 on the Individual Gastrointestinal Symptom and Impact Scale (IGISIS), as compared to TECFIDERA (p=0.0003).
In October 2019 Biogen dosed the first patient in a Phase 2 study of BIIB093 (glibenclamide IV) for brain contusion.
In October 2019 Biogen announced that the journal Neuromuscular Disorders published data from NURTURE, the first study investigating a treatment targeting the underlying cause of spinal muscular atrophy (SMA) in infants treated pre-symptomatically. Data from the NURTURE study demonstrated that infants who initiated treatment with SPINRAZA prior to the onset of clinical symptoms attained unparalleled results compared to the natural history of the disease. As of March 2019 all participants were alive, without the need for permanent ventilation, and experienced continuous improvements with the majority achieving motor milestones in timelines consistent with normal development. The results also demonstrated durability of effect with children making progress throughout the study. These published results from the NURTURE study were previously presented at the 2019 Cure SMA Annual SMA Conference and the 5th Congress of the European Academy of Neurology.
In October 2019 the European Medicines Agency updated the summaries of product characteristics (SmPCs) for AVONEX and PLEGRIDY to remove pregnancy contraindications and, where clinically needed, to allow use during pregnancy and breastfeeding in women with relapsing MS.
In September 2019 Biogen presented new data further demonstrating the safety and efficacy of treatment with SPINRAZA in individuals with later-onset SMA at the 13th Congress of the European Paediatric Neurology Society. An integrated analysis from SHINE, an open-label extension study for patients with SMA who participated in prior SPINRAZA studies, found that children with later-onset SMA (Type 2 or Type 3) experienced improvements or stabilization in one or more measures of motor function for up to nearly six years, in contrast to the expected decline observed in natural history cohorts.
In September 2019 Biogen announced that it plans to initiate a new study evaluating whether a higher dose of SPINRAZA can offer even greater efficacy in treating SMA. DEVOTE is a Phase 2/3 randomized, controlled dose-escalating study that will be conducted at 50 sites around the world with a projected enrollment of 126 individuals with SMA of all ages, including adults.
In September 2019 Roche announced that the FDA granted Breakthrough Therapy Designation to GAZYVA for adults with lupus nephritis. This designation was granted based on data from the Phase 2
NOBILITY study in adult patients with proliferative lupus nephritis which showed GAZYVA, in combination with standard of care (mycophenolate mofetil or mycophenolic acid and corticosteroids), demonstrated enhanced efficacy compared to placebo plus standard of care alone in achieving complete renal response at one year. In the U.S., GAZYVA is part of a collaboration between Biogen and Genentech, Inc., a wholly-owned member of the Roche Group.
In September 2019 Biogen announced that it has been ranked the #1 biotechnology company on the Dow Jones Sustainability World Index for the fourth time, after being the first U.S.-based biotech company to ever make the list in 2013.
In September 2019 Eisai Co., Ltd. and Biogen announced the decision to discontinue the Phase 3 clinical studies (MISSION AD1 and MISSION AD2) of the investigational oral BACE (beta amyloid cleaving enzyme) inhibitor elenbecestat (development code: E2609) in patients with early AD.
In September 2019 Biogen presented new data at the 35th Congress of the European Committee for Treatment and Research in MS (ECTRIMS) and 24th Annual Conference of Rehabilitation in MS. Key data included new 10-year results from the ongoing Phase 3 ENDORSE extension study and comparative effectiveness analyses of TECFIDERA, interim data from the Phase 3 EVOLVE-MS-1 study evaluating the safety and efficacy of VUMERITY, data from the TYSABRI Observational Program evaluating the effectiveness of every six weeks (Q6W) dosing, and data supporting that exposure to interferon beta treatment, including PLEGRIDY and AVONEX, before conception and/or during pregnancy is not expected to have an adverse effect on pregnancy or infant growth outcomes.
In August 2019 Biogen dosed the first patient in the Phase 1 study of BIIB094 (ION859), an antisense oligonucleotide targeting leucine-rich repeat kinase 2 (LRRK2) for Parkinson’s disease.
In August 2019 Biogen discontinued the Phase 2b study of BG00011 for IPF due to safety concerns.
Leadership Updates
In October 2019 Biogen announced that Alfred Sandrock, Jr., M.D., Ph.D., has been named Executive Vice President, Research and Development, in addition to his responsibilities as Chief Medical Officer, and Alphonse Galdes, Ph.D., has been appointed Executive Vice President, Pharmaceutical Operations and Technology. Michael D. Ehlers, M.D., Ph.D., has stepped down as Executive Vice President, Research and Development to pursue a new external career opportunity.
Conference Call and Webcast
The Company’s earnings conference call for the third quarter, which will include an update on aducanumab, will be broadcast via the internet at 8:00 a.m. ET on October 22, 2019, and will be accessible through the Investors section of Biogen’s website, www.biogen.com. Supplemental information in the form of a slide presentation is also accessible at the same location on the internet and will be subsequently available on the website for at least one month.