On April 24, 2018 Biogen Inc. (Nasdaq: BIIB) reported first quarter 2018 financial results, including (Press release, Biogen, APR 24, 2018, View Source [SID1234525629]):
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Total revenues of $3.1 billion, an 11% increase versus the prior year or a 15% increase excluding hemophilia revenues*.
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Multiple sclerosis (MS) revenues were $2.1 billion, including approximately $77 million in royalties on the sales of OCREVUS.
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Revenue growth was principally driven by SPINRAZA, which contributed $364 million in global revenues, biosimilars, which contributed $128 million, and Other Revenues of $164 million.
GAAP net income and diluted earnings per share (EPS) attributable to Biogen Inc. of $1.2 billion and $5.54, respectively, compared to $748 million and $3.46 in the first quarter of 2017, respectively.
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In the first quarter of last year GAAP net income and diluted EPS were negatively impacted by $243 million and $1.14, net of tax, respectively, related to the U.S. Patent and Trademark Office ruling in favor of Biogen in the Company’s interference proceeding with Forward Pharma A/S.
Non-GAAP net income and diluted EPS attributable to Biogen Inc. of $1.3 billion and $6.05, respectively, compared to $1.1 billion and $5.20 in the first quarter of 2017, respectively.
In the fourth quarter of 2017 GAAP net income and EPS were negatively impacted by $1.2 billion and $5.51, respectively, due to the transition toll tax and re-measurement of the Company’s net deferred tax assets related to the Tax Cuts and Jobs Act of 2017.
A reconciliation of GAAP to Non-GAAP quarterly financial results can be found in Table 3 at the end of this press release.
"We started 2018 well with our first quarter revenues growing 11% versus the prior year, or 15% excluding hemophilia revenues. This is in line with our expectations," said Michel Vounatsos, Biogen’s Chief Executive Officer. "The fundamentals and resilience of our multiple sclerosis business remained strong, while we experienced anticipated seasonality at the beginning of the year. I believe there is significant opportunity for the future growth of SPINRAZA worldwide as we position Biogen for long-term leadership in spinal muscular atrophy."
"As pioneers in neuroscience, we continued to advance and expand our portfolio of potential breakthrough treatments for areas of high unmet need. We have added a new Phase 2 asset in our emerging growth area of neuropsychiatry, and we meaningfully enhanced our collaboration with Ionis to develop a new pipeline of gene-based therapies for neurological diseases."
U.S. MS revenues in the first quarter of 2018 were negatively impacted by approximately $180 million due to the difference between the channel inventory level changes during the first quarter of 2018 and the fourth quarter of 2017 for TECFIDERA, AVONEX and PLEGRIDY.
In the first quarter of 2017 TYSABRI revenues outside the U.S. benefitted by approximately $45 million due to reaching an agreement with the Price and Reimbursement Committee of the Italian National Medicines Agency (AIFA) related to TYSABRI sales in prior periods.
In the first quarter of 2018 SPINRAZA revenues comprised $188 million in sales in the U.S. and $176 million in sales outside the U.S. The number of patients receiving SPINRAZA grew 16% in the U.S.
and 56% outside the U.S. versus the fourth quarter of 2017. Outside the U.S., SPINRAZA revenues were primarily from Germany, Japan, Italy and France.
Total revenues benefitted by approximately $54 million versus the prior year due to changes in foreign exchange rates, offset by hedging losses.
Other Financial Highlights
For the first quarter of 2018 the Company’s effective GAAP tax rate was 22%, and the Company’s effective non-GAAP tax rate was 21%.
In the first quarter of 2018 Biogen repurchased approximately 0.9 million shares of the Company’s common stock for a total value of $250 million.
As of March 31, 2018, Biogen had cash, cash equivalents and marketable securities totaling approximately $7.1 billion, and approximately $5.9 billion in notes payable. During the first quarter of 2018 Biogen repatriated $3.5 billion of cash, resulting in 85% of cash, cash equivalents and marketable securities being held in the U.S. at the end of the quarter.
For the first quarter of 2018 the Company’s weighted average diluted shares were 212 million.
Business Development Updates
In April 2018 Biogen and Ionis Pharmaceuticals Inc. (Ionis) announced a new ten-year exclusive collaboration agreement that leverages Biogen’s leadership in neuroscience research and drug development with Ionis’ leadership in antisense oligonucleotide (ASO) drug discovery to develop novel gene-based drug candidates for a broad range of neurological diseases. Under the terms of the collaboration, Biogen will make an upfront payment of $375 million and purchase $500 million of Ionis equity at a 25% cash premium, for a total expected payment of $1 billion. Biogen will have the option to license therapies arising out of this collaboration and will be responsible for their development and commercialization. Biogen may pay development milestones to Ionis of up to $125 million or $270 million, depending on the indication, and royalties on net sales. The transaction is subject to customary closing conditions, including the expiration of the applicable waiting period under the Hart Scott Rodino Antitrust Improvements Act of 1976 in the United States and is expected to close in the second quarter of 2018.
In March 2018 Biogen announced an agreement to acquire from Pfizer Inc. BIIB104 (formerly known as PF-04958242), and the transaction closed today. BIIB104 is a first-in-class, Phase 2b ready AMPA receptor potentiator for cognitive impairment associated with schizophrenia (CIAS), representing the Company’s first program in neuropsychiatry. AMPA receptors mediate fast excitatory synaptic transmission in the central nervous system. BIIB104 has previously demonstrated an acceptable safety profile and treatment effect trends across key cognitive domains in Phase 1b clinical studies. The purchase included an upfront payment of $75 million with up to $515 million in additional development and commercialization milestone payments, as well as tiered royalties in the low to mid-teen percentages.
Recent Events
This week, Biogen is presenting data from its portfolio of marketed treatments and clinical development programs for neurodegenerative diseases at the 70th annual meeting of the American Academy of Neurology (AAN) in Los Angeles, California. Platform and poster presentations are highlighting the benefits SPINRAZA provides for individuals with spinal muscular atrophy (SMA) across the age and disease spectrum, the Company’s MS therapies and non-therapeutic research collaborations designed to elevate the care of MS and the Company’s investigational therapies for Alzheimer’s disease, Parkinson’s disease and progressive supranuclear palsy.
In April 2018 Biogen’s collaboration partner Applied Genetic Technologies Corporation announced that it has dosed the first patient in the Phase 1/2 clinical trial evaluating the safety and efficacy of an investigational AAV-based gene therapy for the treatment of x-linked retinitis pigmentosa.
In April 2018 Biogen and Samsung Bioepis announced an agreement with AbbVie Inc. for the commercialization of IMRALDITM, a biosimilar referencing HUMIRA (adalimumab). Under terms of the agreement, AbbVie will grant patent licenses for the use and sale of IMRALDI in Europe, on a country-by-country basis. The companies have agreed to dismiss all pending patent litigation. Biogen expects to launch IMRALDI in Europe in October 2018.
In March 2018 Biogen initiated a Phase 1 study of BIIB095, a Nav 1.7 inhibitor for neuropathic pain.
In March 2018 Biogen presented data from its portfolio of investigational therapies for people with neurodegenerative diseases at the Advances in Alzheimer’s and Parkinson’s Therapies (AAT-AD/PD) Focus Meeting in Torino, Italy. Data presented included an analysis from the Phase 1b PRIME study of aducanumab for early Alzheimer’s disease demonstrating a 69% reduction from baseline in amyloid plaque as observed on the Centiloid Conversion scale for the 10 mg/kg treatment group at 54 weeks (P<0.001 versus placebo).
In March 2018 Biogen presented new data for SPINRAZA for the treatment of SMA at the Muscular Dystrophy Association (MDA) Clinical Conference in Arlington, Virginia. Data included new interim Phase 2 results from NURTURE, the ongoing open-label, single-arm study evaluating the efficacy and safety of SPINRAZA among pre-symptomatic infants with SMA. In NURTURE, all infants treated with SPINRAZA were alive, did not require permanent ventilation and showed improvement in motor function and motor milestone achievements as of July 5, 2017, compared to the disease’s natural history. Biogen also presented a case series demonstrating SPINRAZA’s effectiveness among teens and young adults.
In March 2018 Biogen and AbbVie announced the voluntary worldwide withdrawal of ZINBRYTA for relapsing MS. The companies believe that characterizing the complex and evolving benefit/risk profile of ZINBRYTA will not be possible going forward given the limited number of patients being treated.
In February 2018 the end of study results from CHERISH, the Phase 3 study evaluating SPINRAZA for the treatment of individuals with later-onset SMA, were published in The New England Journal of Medicine. Results from CHERISH demonstrated meaningful motor function and upper limb improvements in individuals with later-onset SMA rarely seen in the natural course of the disease, which is typically a continued decline in motor function over time.
In February 2018 Biogen announced that in the Phase 2b dose-ranging ACTION 2 study in individuals with acute ischemic stroke (AIS), natalizumab did not demonstrate improvement in clinical outcomes compared to placebo. Both doses of natalizumab were generally well-tolerated and no new or important safety signals were observed. The results of the Phase 2b ACTION 2 study do not impact the benefit-risk profile of natalizumab in approved indications, including MS. Further development of natalizumab in AIS will not be pursued
Conference Call and Webcast
The Company’s earnings conference call for the first quarter will be broadcast via the internet at 8:30 a.m. ET on April 24, 2018, 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.
Note about Future Earnings Releases and Calls
Starting with the second quarter 2018 earnings release, Biogen intends to cease publishing press releases relating to future earnings calls, earnings releases and investor events via newswire services. The Company will post these materials on the Investors section of Biogen’s website, www.biogen.com, and issue a statement on Twitter (@biogen) when they become available.