On July 22, 2020 Biogen Inc. (Nasdaq: BIIB) reported second quarter 2020 financial results (Press release, Biogen, JUL 22, 2020, View Source [SID1234562249]).
Schedule your 30 min Free 1stOncology Demo!
Discover why more than 1,500 members use 1stOncology™ to excel in:
Early/Late Stage Pipeline Development - Target Scouting - Clinical Biomarkers - Indication Selection & Expansion - BD&L Contacts - Conference Reports - Combinatorial Drug Settings - Companion Diagnostics - Drug Repositioning - First-in-class Analysis - Competitive Analysis - Deals & Licensing
Schedule Your 30 min Free Demo!
"In the second quarter, Biogen continued to deliver strong financial results. We are pleased to have completed the BLA submission for aducanumab and look forward to the prospect of launching the first therapy to reduce clinical decline in Alzheimer’s disease," said Michel Vounatsos, Biogen’s Chief Executive Officer. "Our progress with aducanumab exemplifies our broader strategy of building a multi-franchise portfolio based on our deep expertise in neuroscience, and we have multiple near-term value creation opportunities in other areas such as ALS, ophthalmology, lupus, stroke, and biosimilars."
Financial Results
• Second quarter total revenues were $3,682 million, a 2% increase versus the second quarter of 2019.
o Multiple sclerosis (MS) revenues, including $208 million in royalties on the sales of OCREVUS, decreased 2% versus the prior year to $2,335 million.
o SPINRAZA revenues increased 1% versus the prior year to $495 million.
o Biosimilars revenues decreased 7% versus the prior year to $172 million.
o Other revenues increased 155% versus the prior year to $408 million primarily due to approximately $330 million in revenues related to the license of certain manufacturing-related intellectual property to one of our corporate partners. o Biogen estimates that its first quarter 2020 product revenues benefitted by approximately $100 million attributed to accelerated sales due to the COVID-19 pandemic, primarily in Europe, of which Biogen believes approximately $75 million was utilized in the second quarter of 2020.
• Second quarter GAAP net income and diluted earnings per share (EPS) attributable to Biogen Inc. were $1,542 million and $9.59, respectively, compared to $1,494 million and $7.85, respectively, in the second quarter of 2019. 2 • Second quarter Non-GAAP net income and diluted EPS attributable to Biogen Inc. were $1,651 million and $10.26, respectively, compared to $1,742 million and $9.15, respectively, in the second quarter of 2019. # Net income attributable to Biogen Inc. Note: Percent changes represented as favorable/(unfavorable) A reconciliation of GAAP to Non-GAAP quarterly financial results can be found in Table 3 at the end of this news release. Note: Numbers may not foot due to rounding; percent changes represented as favorable/(unfavorable)
• In the second quarter of 2020 channel inventory levels in the U.S. increased by approximately $10 million for TECFIDERA, VUMERITY, 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 $115 million in the first quarter of 2020. 4 Expense Highlights Note: Percent changes represented as favorable/(unfavorable)
• GAAP R&D expense in the second quarter of 2020 included $208 million related to Biogen’s agreement with Sangamo Therapeutics, Inc. (Sangamo) to develop gene regulation therapies for Alzheimer’s disease, Parkinson’s disease, neuromuscular disease, and other neurological diseases. Non-GAAP R&D expense in the second quarter of 2020 included $125 million related to the Sangamo agreement.
• GAAP SG&A expense in the second quarter of 2019 included acquisition-related charges incurred in connection with our acquisition of Nightstar Therapeutics plc, totaling $33 million. Other Financial Highlights
• For the second quarter of 2020 GAAP and Non-GAAP net expense related to collaboration profit sharing was $22 million.
• For the second quarter of 2020 GAAP other income was $63 million, which included $103 million in unrealized gains on investments, principally driven by an increase in the fair value of Biogen’s equity investments in Ionis Pharmaceuticals, Inc. and Sangamo. Non-GAAP other expense for the second quarter of 2020 was $30 million, driven by net interest expense, foreign exchange rate losses, and losses on security sales.
• In the second quarter of 2020 net income attributable to noncontrolling interest included a $75 million payment to Neurimmune SubOne AG related to completing the submission of a Biologics License Application (BLA) to the U.S. Food and Drug Administration (FDA) for the approval of aducanumab.
• For the second quarter of 2020 the Company’s effective GAAP tax rate was approximately 22%, an increase from approximately 14% in the second quarter of 2019. This is due to a non-recurring prior year income tax benefit on a change in the Company’s tax profile and a current year income tax expense related to a net valuation allowance against certain deferred tax assets, due to the decision of the U.S. District Court of the Northern District of West Virginia that the asserted claims of U.S. patent No. 8,399,514, which cover the treatment of MS with TECFIDERA, are invalid. For 5 the second quarter of 2020 the Company’s effective Non-GAAP tax rate was approximately 19%, an increase from approximately 14% in the second quarter of 2019, primarily due to the non-recurring benefit of the prior year change in the Company’s tax profile.
• In the second quarter of 2020 Biogen repurchased approximately 9.0 million shares of the Company’s common stock for a total value of approximately $2,809 million. o As of June 30, 2020, approximately $1,250 million remained under the share repurchase program authorized in December 2019.
• As of June 30, 2020, Biogen had cash, cash equivalents, and marketable securities totaling $5,250 million and $7,424 million in notes payable.
• In the second quarter of 2020 the Company generated approximately $1,948 million in net cash flows from operations.
• For the second quarter of 2020 the Company’s weighted average diluted shares were 161 million. 2020 Financial Guidance Biogen provided an update to its full year 2020 financial guidance. This financial guidance consists of the following components:
• Revenue is expected to be approximately $13.8 billion to $14.2 billion, compared to the prior guidance range of $14.0 billion to $14.3 billion.
• GAAP and Non-GAAP R&D expense is expected to be approximately 16% to 17% of total revenues, compared to the prior guidance range of approximately 15% to 16% of total revenues.
• GAAP and Non-GAAP SG&A expense is expected to be approximately 17.5% to 18.5% of total revenues, compared to the prior guidance range of approximately 19.5% to 20.5% of total revenues.
• GAAP tax rate is expected to be approximately 18.5% to 19.5%, compared to the prior guidance range of approximately 18% to 19%.
• Non-GAAP tax rate is expected to be approximately 18% to 19%, unchanged versus the prior guidance range.
• GAAP diluted EPS is expected to be between $32.00 and $34.00, an increase from the prior guidance range of $29.50 to $31.50.
• Non-GAAP diluted EPS is expected to be between $34.00 and $36.00, an increase from the prior guidance range of $31.50 to $33.50. 6 This financial guidance does not include any operational impact from the potential entry of generic versions of TECFIDERA in the U.S. in 2020. This financial guidance does not include any impact from potential acquisitions or large business development transactions, as both are hard to predict. This financial guidance assumes additional SG&A expense in the second half of 2020 related to aducanumab, a stable share count, and no change to foreign exchange rates for the remainder of the year. Biogen may incur charges, realize gains or losses, or experience other events or circumstances in 2020 that could cause actual results to vary from this financial guidance. A reconciliation of GAAP to Non-GAAP financial guidance can be found in Table 3 at the end of this news release. Recent Events
• In July 2020 Biogen completed the submission of a BLA to the FDA for aducanumab as a treatment for Alzheimer’s disease. The completed submission followed ongoing collaboration with the FDA and includes clinical data from the Phase 3 EMERGE and ENGAGE studies as well as the Phase 1b PRIME study. As part of the completed submission, Biogen has requested Priority Review. If approved, aducanumab would become the first therapy to reduce the clinical decline of Alzheimer’s disease and would also be the first therapy to demonstrate that removing amyloid beta resulted in better clinical outcomes. Aducanumab is being developed in collaboration with Eisai Co., Ltd.
• In July 2020 Biogen announced it plans to initiate a global Phase 4 clinical study, RESPOND, to evaluate the efficacy and safety of SPINRAZA in patients with spinal muscular atrophy (SMA) who have a suboptimal response to gene therapy Zolgensma (onasemnogene abeparvovec). People with SMA do not produce enough survival motor neuron (SMN) protein, which is critical for the maintenance of motor neurons that support walking and basic functions of life, including breathing and swallowing. The RESPOND study will seek to understand if the proven efficacy of SPINRAZA and its continuous production of SMN protein may also benefit patients treated with gene therapy. Biogen plans to submit the study protocol to the regulatory authorities in the coming months and aims for the first eligible patients to be enrolled in the RESPOND study in Q1 2021.
• In July 2020 the Alzheimer’s Clinical Trials Consortium, Eisai Co., Ltd. and Biogen announced that a new Phase 3 clinical study (AHEAD 3-45) of BAN2401, an antiamyloid beta (Aβ) antibody, has been initiated for individuals with preclinical Alzheimer’s disease who have intermediate or elevated levels of amyloid in their brains. Currently, BAN2401 is being studied in a pivotal Phase 3 clinical study in symptomatic early Alzheimer’s disease (Clarity AD), following the outcome of a Phase 2 clinical study (Study 201). AHEAD 3-45 will be conducted in the U.S., Japan, Canada, Australia, Singapore, and Europe.
• In July 2020 Biogen announced that positive results from a Phase 1/2 study of tofersen (BIIB067) for the potential treatment of superoxide dismutase 1 (SOD1) amyotrophic lateral sclerosis (ALS) were published in The New England Journal of Medicine. Final 7 Phase 1/2 study results demonstrated proof-of-concept and proof-of-biology of tofersen, which is currently being investigated in the ongoing Phase 3 VALOR study. SOD1 ALS is the second most common genetic form of ALS, accounting for approximately 2% of all ALS cases. Tofersen is Biogen’s lead clinical program in its ALS portfolio, which also includes BIIB078 (IONIS-C9Rx) for C9orf72 ALS and BIIB100 (XPO1 inhibitor) for all forms of ALS.
• In July 2020 Biogen dosed the first patient in a Phase 1 study of BIIB101, an antisense oligonucleotide targeting alpha synuclein, in multiple system atrophy.
• In July 2020 Biogen entered into an exclusive licensing agreement with Massachusetts Eye and Ear, a member hospital of Mass General Brigham, to develop a potential treatment for inherited retinal degeneration due to mutations in the PRPF31 gene, which are among the most common causes for autosomal dominant retinitis pigmentosa. Biogen will conduct pre-clinical studies needed to support progression to clinical trials of PRPF31 gene therapy. As part of this agreement, Biogen will receive an exclusive license to develop the potential treatment worldwide and will be responsible for all FDA required investigational new drug enabling studies, clinical development, and commercialization.
• In June 2020 Samsung Bioepis Co., Ltd. (Samsung Bioepis) initiated a Phase 3 study for SB15, a biosimilar referencing EYLEA. EYLEA is widely used to treat ophthalmologic conditions such as neovascular (wet) age-related macular degeneration, macular edema following retinal vein occlusion, diabetic macular edema (DME), and diabetic retinopathy in patients with DME. Biogen has the exclusive rights to commercialize SB15 in major markets worldwide, including the U.S., Canada, Europe, Japan, and Australia.
• In June 2020 Biogen submitted a Supplemental Biologics License Application (sBLA) for a subcutaneous (SC) formulation of TYSABRI (natalizumab) to the FDA. This follows a regulatory submission for SC TYSABRI to the European Medicines Agency in March 2020. The filings are supported by data from the DELIVER and REFINE studies, which demonstrated that natalizumab 300 mg SC every 4 weeks (Q4W) was comparable to standard 300 mg intravenous Q4W dosing with respect to clinical and MRI efficacy, pharmacokinetics / pharmacodynamics, immunogenicity, and safety.
• In June 2020 Biogen announced new results from NURTURE, the longest study of presymptomatic patients with SMA. In infants genetically diagnosed with SMA, new data demonstrated that early and sustained treatment with SPINRAZA for up to 4.8 years enabled unprecedented survival. Patients continued to maintain and make progressive gains in motor function compared to the natural course of the disease. These results were presented at the virtual Cure SMA Research & Clinical Care Meeting.
• In June 2020 Biogen shared positive data from the 16-week cutaneous lupus erythematosus (CLE) portion of the Phase 2 LILAC study. The study evaluated the efficacy and safety of BIIB059, a fully humanized IgG1 monoclonal antibody (mAb) targeting blood dendritic cell antigen 2 (BDCA2) expressed on plasmacytoid dendritic 8 cells (pDCs). The data were presented at the European E-Congress of Rheumatology (EULAR).
• In May 2020 Biogen entered into a process development and manufacturing agreement with Vir Biotechnology, Inc. (Vir). Under this agreement, Biogen will perform process development activities and specified manufacturing and process transfer services to enable commercial supply of Vir’s SARS-CoV-2 monoclonal antibodies.
• In May 2020 Samsung Bioepis announced that the primary endpoints were met in the randomized, double-masked, Phase 3 trial comparing the efficacy, safety, and immunogenicity of SB11 to the reference product (LUCENTIS). Biogen has the exclusive rights to commercialize SB11 in major markets worldwide, including the U.S., Canada, Europe, Japan, and Australia.
• In May 2020, through the 2020 American Academy of Neurology (AAN) Science Highlights virtual platform, Biogen announced new data from its MS treatment portfolio. Additional clinical data support VUMERITY as an important oral treatment option in relapsing MS and reinforce the efficacy of TECFIDERA. In addition, an analysis of TYSABRI contributed to data demonstrating the reduced risk of progressive multifocal leukoencephalopathy (PML) through extended interval dosing (EID; approximately every six weeks) as compared to the currently approved dosing of every four weeks.
• In May 2020, through the 2020 AAN Science Highlights virtual platform, Biogen announced additional data from the SPINRAZA clinical development program that further demonstrated the sustained efficacy and longer-term safety of SPINRAZA in a broad range of patients with SMA. The SHINE open-label extension study (NCT02594124) has enrolled 292 patients (infants through teenagers) from 5 previous SPINRAZA clinical studies, including ENDEAR. New findings from the SHINE study show that treatment with SPINRAZA resulted in motor function improvement or disease stabilization in toddlers, children, and young adults who were treated continuously, some for up to six and a half years.
• In April 2020 Biogen released its 2019 Corporate Responsibility Report that demonstrated continuous progress across several environmental, social, and governance (ESG) metrics. The report outlines the Company’s long-term commitment to corporate responsibility by taking a multi-stakeholder approach to business decisions, creating an inclusive culture, reducing its environmental footprint, and increasing reporting transparency on ESG issues. Leadership Update
• In July 2020 Biogen announced that Michael R. McDonnell has been appointed Executive Vice President (EVP) and Chief Financial Officer (CFO) effective August 15, 2020, replacing Jeffrey D. Capello, who will step down as EVP and CFO. Mr. Capello will remain at the Company through September 15, 2020, and will assist with the transition. 9 Conference Call and Webcast The Company’s earnings conference call for the second quarter will be broadcast via the internet at 8:00 a.m. ET on July 22, 2020, 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